After wild weather, higher food prices on horizon After heavy rain this year, th
ID: 1137300 • Letter: A
Question
After wild weather, higher food prices on horizon After heavy rain this year, the corn harvest will be less than expected while the demand for corn will continue to increase. Food prices will continue to rise. Using the demand and supply model, explain why food prices are expected to rise. In the market for com, the poor com harvest O A. creates a shortage of corn, and as a result the demand for corn increases and the price of corn falls Source: npr, June 9, 2011 Food prices are expected to rise because O A. the change in the price of corn decreases the supply of food made from com O B. the change in the price of corn decreases the demand for food made from com OC. food prices rise every year O D. the change in the price of corn increases the supply of food made from com O E. the change in the price of corn increases the demand for food made from corn 0 B. creates a shortage of corn, and as a result the demand for corn increases and the price of corn rises C. O D. 0 E. has no effect on the market for com because the demand for corn increases at the same time decreases the supply of corn, and with the increase in the demand for corn, the price of corn falls decreases the supply of corn, and with the increase in the demand for com, the price of com risesExplanation / Answer
Ans:
1) Option E
decreases the supply of corn,and with the increase in the demand for corn, the price of corn rises.
In this case the poor harvest of corn decreases the supply of corn and since there is continuous increase in the demand for corn, the price of corn will rise.
2) Option A
the change in the price of corn decreases the supply of food made from corn.
The decrease in the suppy of food made from corn will cause the food prices to rise.The supply of food is decreased because the rise in the prices of corn increase the cost of production of food made from corn.