Asked by Poppin galaxy on Jun 26, 2024
Verified
Scientists find that eating corn three times a day will prolong life. This leads to a shift in preferences away from wheat and toward corn. As we move from one equilibrium to another, we can predict that
A) all input markets are affected.
B) all input markets except land are affected because both products use land as an input.
C) labor markets are not affected because the wheat industry and the corn industry use laborers to drive tractors.
D) even if they use different technologies, no input markets are affected because they use the same inputs.
Input Markets
Markets where factors of production (such as labor, materials, and capital) are bought and sold.
Equilibrium
A state in a market where supply equals demand, and there is no external pressure to change the price or quantity.
Wheat Industry
A sector of the economy focused on the production, processing, and distribution of wheat and wheat-based products.
- Comprehend the importance of input markets and their relation to output markets.
- Evaluate the effects of shifts in demand and supply on resource allocation and industry costs.
Verified Answer
OL
Octavio LimpiasJun 29, 2024
Final Answer :
A
Explanation :
When preferences shift from wheat to corn, it affects all input markets because the demand for inputs related to corn production increases, while demand for inputs related to wheat production decreases. This includes labor, land, machinery, and any other inputs specific to these crops.
Learning Objectives
- Comprehend the importance of input markets and their relation to output markets.
- Evaluate the effects of shifts in demand and supply on resource allocation and industry costs.