If we were to build a model measuring the supply of corn, which of the following could be an example of an exogenous variable in the model?
A)The price of corn
B)The quantity supplied of corn
C)The quantity of rain
D)The demand for corn

Question

Quizplus · Accepted Answer

The quantity of rain is an external factor affecting the supply of corn, and therefore, can be considered an exogenous variable in the model. The other choices, such as the price of corn, quantity supplied of corn, and demand for corn, are all endogenous variables that are directly related to the supply of corn. The quantity of rain would be an exogenous variable because it is outside of the control of corn producers and affects the supply of corn. The price of corn, quantity supplied of corn, and demand for corn would all be endogenous variables because they are directly related to the supply of corn.

If We Were to Build a Model Measuring the Supply