Last year Pat was a soybean farmer and Chris was a corn farmer.This year,high demand for ethanol,an automobile fuel made from corn,causes the price of corn to increase.
Refer to the information above.You would predict that this year Pat may:
A)grow more soybeans.
B)switch to growing corn.
C)continue to grow the same amount of soybeans.
D)go out of business.

Question

Quizplus · Accepted Answer

The allocative function of price provides incentive to allocate more resources toward corn production.

Last Year Pat Was a Soybean Farmer and Chris Was