Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The farmer will plant more soybeans, leading to a decrease in soybean prices due to oversupply.
B
The farmer will plant more corn, reducing soybean supply, which will likely increase soybean prices.
C
The farmer will plant the same amount of both crops, resulting in stable soybean prices.
D
The farmer will switch to planting a different crop entirely, having no effect on soybean prices.
Understanding the Answer
Let's break down why this is correct
Answer
If the market price of corn rises significantly, the farmer is likely to choose to plant more corn instead of soybeans. This is because higher corn prices mean the farmer can earn more money from selling corn. As more farmers switch to planting corn, there will be fewer soybeans produced, which can lead to a decrease in the supply of soybeans in the market. With less supply and the same or even growing demand for soybeans, the price of soybeans may rise in the short term. For example, if many farmers in the area decide to plant corn, the reduced availability of soybeans could cause their price to increase as buyers compete for the smaller amount available.
Detailed Explanation
When corn prices go up, the farmer will want to plant more corn. Other options are incorrect because This answer thinks the farmer will grow more soybeans; This choice suggests the farmer will keep planting the same amount of both crops.
Key Concepts
Production Possibilities
Substitutes in Production
Market Dynamics
Topic
Production Possibilities and Price Effects
Difficulty
hard level question
Cognitive Level
understand
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