Question

Okra was $13.00 per bushel in 2015, and 1.5 million bushels were sold. Okra was $14.00...

Okra was $13.00 per bushel in 2015, and 1.5 million bushels were sold. Okra was $14.00 per bushel in 2016, and 2.0 million bushels were sold. “If in both cases the okra market was in equilibrium, this must be an example of an exception to the law of demand."

Homework Answers

Answer #1

Answer.) In above example, Okra would be classified as a Giffen good. These are the types of inferior goods whose quantity demanded increases with an increase in price and decreases with the decrease in price. Remember that inferior goods are those goods for which we have an inverse relationship with income. This means that if there is rise in income of customer, it will reduce consumption of inferior good. Additionally, All giffen goods are inferior goods but all inferior goods are not giffen goods.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. A price floor of 89 cents per bushel of cranberries was recently increased to $1.00...
1. A price floor of 89 cents per bushel of cranberries was recently increased to $1.00 per bushel. Before the increase, the market price of cranberries was 89 cents. What will happen to the market price in the market? The market price will ______________. ​[The next question asks about the quantity sold.] a not change b increase c decrease d One cannot tell. 2. If a city places a tax on a good, what will happen to the consumer surplus...
Refer to Example 2.5 on the market for wheat. In​ 1998, the total demand for U.S....
Refer to Example 2.5 on the market for wheat. In​ 1998, the total demand for U.S. wheat was QD=3,244−283P and the domestic supply was QS=1,944+207P. At the end of​ 1998, both Brazil and Indonesia opened their wheat markets to U.S. farmers. Suppose that these new markets add 250 million bushels to U.S. wheat demand. What will be the​ free-market price of wheat and what quantity will be produced and sold by U.S.​ farmers? The​ free-market price of wheat will be...
On December 31, 2015, Berclair Inc. had 400 million shares of common stock and 5 million...
On December 31, 2015, Berclair Inc. had 400 million shares of common stock and 5 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2016, Berclair purchased 24 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2016. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2016, was $550 million. The income tax rate...
If a competitive firm can sell a bushel of soybeans for $25 per bushel and it...
If a competitive firm can sell a bushel of soybeans for $25 per bushel and it has an average variable cost of $20 per bushel, and the marginal cost is $22 per bushel, the firm should: expand output. reduce output. increase price. cut output to zero. In the long run, the competitive firm always produces at the: minimum of the average variable cost curve. minimum of the average total cost curve. maximum possible point of production. minimum of the marginal...
Paladin Furnishings generated $2 million in sales during 2016, and its year-end total assets were $1.5...
Paladin Furnishings generated $2 million in sales during 2016, and its year-end total assets were $1.5 million. Also, at year-end 2016, current liabilities were $500,000, consisting of $200,000 of notes payable, $200,000 of accounts payable, and $100,000 of accrued liabilities. Looking ahead to 2017, the company estimates that its assets must increase by $0.75 for every $1.00 increase in sales. Paladin's profit margin is 6%, and its retention ratio is 60%. How large of a sales increase can the company...
(42)If cooks are being paid $12 per hour by law in the state of California because...
(42)If cooks are being paid $12 per hour by law in the state of California because the government in California concluded that the market determined wage of $8 per hour was too low for their labor services, it can be inferred that: (a)The cooks are being paid a non-binding wage ceiling (b)The cooks are being paid a binding maximum wage (c)The cooks are being paid a binding minimum wage (d)The cooks are being paid a non-binding wage floor (43)Which of...
1.) True or False? For all societies, resources are scarce, and technology is limited, while people’s...
1.) True or False? For all societies, resources are scarce, and technology is limited, while people’s wants and needs for goods and services seem to be unlimited. (2 points) 2.) (1 point) Adam Smith’s “invisible hand” refers to a.) the subtle and often hidden methods that businesses use to profit at consumers’ expense. b.) the ability of free markets to reach desirable outcomes, despite the self-interest of market participants. c.) the ability of government regulations to benefit consumers, even if...
1. Which is the most accurate definition of the study of economics? [1] Distributing surplus goods...
1. Which is the most accurate definition of the study of economics? [1] Distributing surplus goods to those in need. [2] Dealing with affluence in a morally bankrupt world. [3] Using scarce resources to satisfy unlimited human wants. [4] Reducing human wants to eliminate the problem of scarcity. 2. Computer software represents [1] labour. [2] land. [3] capital. [4] entrepreneurship. 3. Suppose you have graduated with a degree in accounting and are offered a job with an accounting firm. But...
1.A firm is a pure monopoly when: a.it is the only seller of a unique product...
1.A firm is a pure monopoly when: a.it is the only seller of a unique product and barriers to entry prevent other sellers from entering the market in the long run. b.it is the only seller of a product that has very few close substitutes and entry into the market in the long run is unrestricted. c.there are only a few other very large firms selling similar products. d.it can sell all it can produce at any price it chooses....
62. As noted in the article about trading pits, a. futures pits in Chicago were closing...
62. As noted in the article about trading pits, a. futures pits in Chicago were closing down. b. futures pits in New York were closing down. c. floor trading on the New York Stock Exchange were closing down. d. All of the above. e. Only A and B of the above. 63. Which of the following are among the lessons that we can reasonably draw from the collapse of Continental Illinois? a. The aggressive pursuit of commercial loans was doomed...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT