\fIs the demand for agricultural products elastic or inelastic? Why? The demand for agricultural products is G) A. inelastic because such products represent a small share in the consumer's budget. O B. inelastic because they are perishable products. O C. inelastic because such products have many close substitutes. O D. inelastic because the markets for such products are dened yery narrowly. O E. elastic because such products are necessities. Suppose the price of salt increases by 25 percent and, as a result, the quantity of pepper demanded (holding the price of pepper constant} decreases by 6 percent. The cross-price elasticity of demand between salt and pepper is D {Enter your response rounded to two decimal places and include a minus sign if appropriate.) An article in the Wall Street Journal in 2019 noted that oil prices had increased to a 3month high following an agreement by Russia and the members of OPEC to reduce their oil production by a combined 1.2 million barrels per day. World oil production is over 100 million barrels per day. Source: Christopher Alessi, "Oil Prices Reach Three-Month Highs on OPEC Cuts," Wall Street Journal, February 20, 201B. Asmall decrease in supply can lead to a large increase in equilibrium price when 0 A. demand is relatively elastic. O B. demand is relatively inelastic. O C. demand is perfectly elastic. O D. supply is perfectly elastic. In particular, the supplyr curve for a particular product will be increasingly more elastic over a E pen'ed of time. Consider the supply of coal. What would make the supply of coal more elastic'?l The supply of coal would become more elastic if Q A. the denition of the market becomes narrower. O B. it were more of a luxury. O C. more substitutes were available. O D. it becomes a larger portion of a consumer's budget. 0 E. the time horizon becomes longer. Firm X introduces a new good A in the market. The laws of demand and supply hold for this good. The rm produces 500 units ofA per month. The good does not have any close substitutes and is priced at $4 per unit. Consumers like this new product and industry analysts expect the price to rise as much as $7 before an equilibrium is reached in this market. At equilibrium, the industry analysts expect quantity demanded and supplied to be 650 units. However. Patrick Clearwater, the operations head at rm X, believes that even at a price of $? per unit, there will still be a shortage of 100 units. Which of the following, if true, will support the view of the industry experts? O A. The inputs needed to produce good A are easily available. 0 B. The demand for good A has shifted to the right. O C- Media reports suggest that rm X does not have employeefriendly policies. 0 D. The rm's cost of production has increased because wages have gone up. 0 E. The number of defective items detected by the rm's quality control team has increased in the last few months, inducing the rm to restrict supply. When lettuce prices doubled, from about $1.55 per head to about $3.10. the reaction of one consumer was quoted in a newspaper article: \"I will not buy [lettuce] when it's $3.10 a head," she said, adding that other green vegetables can ll in for lettuce. "If bread were $5 a loaf we'd still have to buyr it. But lettuce is not that important in our family." Justin Bachman, \"Sorry, Romaine Only," Associated Press, March 29, 2002. For this consumer's household, which product has the higher price elasticity of demand: bread or lettuce? |:l_