Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The supply of soybeans will decrease as farmers allocate more resources to corn production.
B
The supply of soybeans will increase as farmers seek to capitalize on higher prices.
C
The supply of soybeans will remain unchanged as farmers stick to their original production plans.
D
The supply of soybeans will decrease due to a general trend of declining agricultural output.
Understanding the Answer
Let's break down why this is correct
Answer
When the price of corn goes up, farmers see it as a chance to make more money by planting corn instead of other crops. Since corn and soybeans are often grown in the same areas, some farmers might decide to plant more corn and less soybeans. This shift means that the supply of soybeans could decrease because fewer farmers are growing them. For example, if a farmer usually plants 100 acres of soybeans but chooses to plant 80 acres of corn instead due to higher corn prices, there will be less soybean supply in the market. Overall, the increase in corn prices can lead to a reduction in soybean supply for the next planting season.
Detailed Explanation
When corn prices go up, farmers want to make more money. Other options are incorrect because Some might think that higher prices for corn mean farmers will grow more soybeans to take advantage of the situation; It's a common belief that farmers will stick to their original plans no matter what.
Key Concepts
Production Possibilities
Price Effects
Resource Allocation
Topic
Production Possibilities and Price Effects
Difficulty
medium level question
Cognitive Level
understand
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