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90daytona 90daytona
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6 years ago
Suppose a draught in Ruritania, the main producer of flax seeds, caused a major reduction in
the quantity of flax seeds produced. At the same time, a major recession causes many people to
lose their jobs. As a result of this recession, people cut back on their consumption of flax seeds.
Assume that the demand curve for flax seed is downward sloping and that the supply curve for
flax seed is upward sloping. Given this information and holding everything else constant, what is
the impact of these two events on the market for flax seed?

a) Both the price and quantity decrease relative to their initial levels.
b) The new price’s relationship to the initial price level cannot be determined but the quantity
decreases relative to its initial level.
c) The price increases and the quantity increases relative to their initial levels.
d) The price decreases relative to its initial level but the new quantity’s relationship to the level
of the initial quantity cannot be determined.


Economics 102 midterm fall2017 - university of Waterloo
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bolbolbolbol
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6 years ago
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90daytona Author
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6 years ago
You make an excellent tutor!
Kstan109
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Yesterday
Good timing, thanks!
deathwing
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2 hours ago
Thanks
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