Question 5If there is a widely held expectation that prices of cotton will be higher next year, then1 pointthe demand for cotton will increase today.the demand for cotton will shift to the left today.the demand for cotton will decrease today.there will be no change in the current demand.
Question
Question 5If there is a widely held expectation that prices of cotton will be higher next year, then1 pointthe demand for cotton will increase today.the demand for cotton will shift to the left today.the demand for cotton will decrease today.there will be no change in the current demand.
Solution
The correct answer is "the demand for cotton will increase today."
Here's why:
-
Expectations of future price increases often lead to an increase in current demand. This is because buyers want to purchase the product now, before the price goes up.
-
This increase in demand shifts the demand curve to the right, not to the left. A shift to the left would indicate a decrease in demand.
-
Therefore, the statement "the demand for cotton will decrease today" is incorrect.
-
Lastly, the statement "there will be no change in the current demand" is also incorrect. As explained above, the expectation of future price increases causes the current demand to increase.
So, based on the principles of economics, if people expect the prices of cotton to be higher next year, the demand for cotton will increase today.
Similar Questions
If both population and per capita income increase. Which of the following is likely to occur?Question 16Select one:a.Housing prices will stay the same since demand and supply are not affected.b.Demand for housing will increase, so housing prices will increase.c.Demand for housing will increase, so housing prices will decrease.d.The supply of housing will decrease, so housing prices will increase.e.The supply of housing will increase, so housing prices will decrease.
Questions 1: Increase in selling price followed by no change in demand for the product will :
If the price of fertilizer, an input in corn production, were to increase. Which of the following would be expected to occur?Question 26Select one:a.The supply of corn would increase, increasing the price of corn.b.Economic theory provides no clue of what would happen.c.The demand for corn would decrease, decreasing the price of corn.d.The demand for corn would increase, increasing the price of corn.e.The supply of corn would decrease, increasing the price of corn.
Question 10 If there is a surplus of wheat on the market,1 pointthen some potential consumers looking to buy wheat will not be able to find any to purchase.then we know that the price is below equilibrium.the price of wheat will rise.the price of wheat will fall.
2. You read about new technology that keeps clothes clean for a long time. You should infer that: *a. Stock prices for laundry detergent companies will eventually go down because demand for laundry detergent will go down.b. Stock prices for laundry detergent companies will eventually go up because traders tend to initially overreact to new technology.c. Nothing will change because new technology rarely affects stock prices.d. This information is already reflected in current stock prices because the new technology is public knowledge.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.