Between 1950 and 2020, the price of wheat fell dramatically from $20.23 per bushel to $4.85 per bushel Suppose between 1950 and 2020, the supply of wheat increased substantially due to increases in productivity, shifting the wheat supply curve to the right. With this supply shift, the amount by which the price of wheat falls will be larger the more the demand for wheat. In addition, assume that between 1950 and 2020 the income of the average American increased substantially and that wheat is a normal good. With this increase in income. OA. the price of wheat will be unaffected. B. the amount by which the price of wheat rises will be smaller the higher the income elasticity of wheat. OC. the amount by which the price of wheat falls will be smaller the higher the income elasticity of wheat. OD. the amount by which the price of wheat rises will be smaller the lower the income elasticity of wheat. E. the amount by which the price of wheat falls will be larger the higher the income elasticity of wheat.

Between 1950 and 2020, the price of wheat fell dramatically from $20.23 per bushel to $4.85 per bushel Suppose between 1950 and 2020, the supply of wheat increased substantially due to increases in productivity, shifting the wheat supply curve to the right. With this supply shift, the amount by which the price of wheat falls will be larger the more the demand for wheat. In addition, assume that between 1950 and 2020 the income of the average American increased substantially and that wheat is a normal good. With this increase in income. OA. the price of wheat will be unaffected. B. the amount by which the price of wheat rises will be smaller the higher the income elasticity of wheat. OC. the amount by which the price of wheat falls will be smaller the higher the income elasticity of wheat. OD. the amount by which the price of wheat rises will be smaller the lower the income elasticity of wheat. E. the amount by which the price of wheat falls will be larger the higher the income elasticity of wheat.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter5: Markets In Motion And Price Controls

Section: Chapter Questions

Problem 10P

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