The market for corn in country a is highly competitive. at the current market price of $5/bushel there is a shortage of 100,000 bushels of corn in this country. media reports claim that the price of corn will rise drastically in the near future. according to these reports, the neighboring country b had witnessed a similar situation recently. at the same price, the shortage in country b was also 100,000 bushels and eventually the equilibrium price in b went up to $10/bushel. both countries are known to have equal number of corn producers and the market supply of corn is identical at all prices. this, combined with the fact that consumers in the two countries also have similar tastes and preferences, led the media to conclude that the price of corn in country a would soon be as high as $10/bushel.
a. farmers will substitute the production of other agricultural goods? (like soybeans) with corn. b. price of other agricultural goods will rise. c. the supply of corn in country a will decline in the near future. d. demand conditions in both countries are identical. e. there are a number of substitutes available for corn in country a.

The answer is: A) Farmers will substitute the production of other agricultural goods? (like soybeans) with corn.

Explanation:

When the price of a certain product increases so steeply, new suppliers will enter the market to offer their products.

Since farmers can only produce one crop at the time in a certain lot, they will always tend to produce the crop that gives them the highest profit. In this case if corn becomes very expensive, it is reasonable to assume that more farmers will produce corn by substituting others crops (like soybean or wheat).

employers prefer to hire ingenious, resourceful people because ingenious people may be more liable to engage in unethical deportment as they can cerebrate outside of the box

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.