📚 Learning Guide
Supply and Demand Analysis
hard

A simultaneous increase in wages for workers at a peach farm and a rise in consumer awareness about the health benefits of peaches will always result in a decrease in the equilibrium quantity of peaches sold.

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Learning Path
Learning Path

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Choose the Best Answer

A

True

B

False

Understanding the Answer

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Answer

When wages for workers at a peach farm increase, the cost of producing peaches goes up. This means that farmers might produce fewer peaches because it costs them more to grow and harvest them. On the other hand, if more people become aware of the health benefits of peaches, they may want to buy more peaches, which increases demand. However, if the supply of peaches decreases due to higher production costs, it can lead to less peaches being available in the market. For example, if a farmer usually sells 100 peaches but cuts back to 80 due to higher wages, even with increased interest in peaches, the total quantity sold may still drop.

Detailed Explanation

When wages increase, farmers might raise prices to cover costs. Other options are incorrect because This answer assumes that higher wages will always lead to fewer peaches sold.

Key Concepts

Supply and Demand Analysis
Market Equilibrium
Consumer Behavior
Topic

Supply and Demand Analysis

Difficulty

hard level question

Cognitive Level

understand

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