As an application of Table 42, consider the effect of a freeze that a. reduces the supply

Question:

As an application of Table 4–2, consider the effect of a freeze that

a. reduces the supply of corn. Choose the correct italicized choices: Because of the freeze, the price of corn will go [up or down].

b. Because corn is an input in cattle raising (since the cows are fed corn), there will be [an increase or a decrease] in the supply of cows once cattle farmers adjust their herds.

c. The price of beef will go [up or down].

d. If corn prices are expected to remain high, wheat farmers may convert some of their land to corn. Corn and wheat are substitute products, and the price of wheat will go [up or down] as its supply is [increased or reduced].

e. If there is a sudden fad to wear leather boots, increasing both the demand for leather and the price of leather, beef (a joint product of leather) prices will go [up or down].

Table 4-2:

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