HANOI UNIVERSITY
FACULTY OF MANAGEMENT AND TOURISM MICROECONOMICS TUTORIAL EXERCISES Semester: Fall 2021 Contents
TUTORIAL 1: INTRODUCTION ...................................................................................... 3
TUTORIAL 2: THE MARKET FORCES, SUPPLY AND DEMAND .................. 11
TUTORIAL 3: ELASTICITY ............................................................................................ 18
TUTORIAL 4: CONSUMERS, PRODUCERS & MARKET EFFICIENCY......... 25
TUTORIAL 5: ....................................................................................................................... 35
TUTORIAL 6: THE THEORY OF CONSUMER CHOICE ....................................... 43
TUTORIAL 7: COST OF PRODUCTION ..................................................................... 50
TUTORIAL 8: FIRMS IN COMPETITIVE MARKET ............................................... 56
TUTORIAL 9: MONOPOLY ............................................................................................ 64
TUTORIAL 10&11: MONOPOLISTIC COMPETITION & OLIGOPOLY ......... 73
TUTORIAL 12: THE MARKET FAILURES ................................................................ 84
TUTORIAL 1: INTRODUCTION
10 Principles of economics and thinking like an economist
Coverage: Chapter 1 & Chapter 2 I. Multiple Choice
Identify the choice that best completes the statement or answers the question. ____ 1. Economics is the study of a. production methods.
b. how society manages its scarce resources.
c. how households decide who performs which tasks.
d. the interaction of business and government. ____
2. A typical society strives to get the most it can from its scarce resources. At the same time, the society
attempts to distribute the benefits of those resources to the members of the society in a fair manner. In
other words, the society faces a tradeoff between a. guns and butter. b. efficiency and equality.
c. inflation and unemployment. d. work and leisure. ____
3. High-school athletes who skip college to become professional athletes
a. obviously do not understand the value of a college education.
b. usually do so because they cannot get into college.
c. understand that the opportunity cost of attending college is very high.
d. are not making a rational decision since the marginal benefits of college outweigh the
marginal costs of college for high-school athletes. ____
4. A construction company has built 50 houses so far this year at a total cost to the company of $8 million. If
the company builds a 51st house, its total cost will increase to $8.18 million. Which of the following statements is correct?
a. For the first 50 houses, the average cost per house was $160,000.
b. The marginal cost of the 51st house, if it is built, will be $180,000.
c. If the company can experience a marginal benefit of $190,000 by building the 51st house,
then the company should build it.
d. All of the above are correct. ____
5. The principle that trade can make everyone better off applies to a. individuals. b. families. c. countries. d. All of the above ____
6. An example of an externality is the impact of
a. bad weather on the income of farmers.
b. the personal income tax on a person's ability to purchase goods and services.
c. pollution from a factory on the health of people in the vicinity of the factory.
d. increases in health care costs on the health of individuals in society. ____
7. Which of these activities will most likely result in an external benefit?
a. A college student buys a deck of cards to play solitaire in her dorm room.
b. An elderly woman plants a flower garden on the vacant lot next to her house.
c. An executive purchases a book to read on a business trip.
d. A ten-year-old uses his allowance to buy new Nike shoes. ____
8. Which of the following is the most correct statement about the relationship between inflation and unemployment?
a. In the short run, falling inflation is associated with falling unemployment.
b. In the short run, falling inflation is associated with rising unemployment.
c. In the long run, falling inflation is associated with falling unemployment.
d. In the long run, falling inflation is associated with rising unemployment. ____
9. Which of the following statements is (are) correct?
a. Relative to other scientists, economists find it more difficult to generate useful data.
b. Theory and observation are important in economics as well as in other sciences.
c. To obtain data, economists often rely upon the natural experiments offered by history.
d. All of the above are correct.
____ 10. Just like models constructed in other areas of science, economic models
a. incorporate assumptions that contradict reality.
b. incorporate all details of the real world. c. complicate reality.
d. avoid the use of diagrams and equations.
____ 11. Which of these statements about economic models is correct?
a. For economists, economic models provide insights about the world.
b. Economic models are built with assumptions.
c. Economic models are often composed of equations and diagrams.
d. All of the above are correct.
____ 12. Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?
a. a landowner leases land to a farmer
b. a farmer hires a teenager to help with harvest
c. a retired farmer sells his combine to a new farmer
d. a woman buys corn for dinner
____ 13. The following table contains some production possibilities for an economy for a given month. Sweaters Gloves 4 300 6 ? 8 100
If the production possibilities frontier is bowed outward, then “?” could be a. 100. b. 150. c. 200. d. 250. Figure 2-6 barrels 45 40 35 A 30 D 25 C 20 B 15 G F 10 5 2 4 6 8 10 12 14 16 bathtubs
____ 14. Refer to Figure 2-6. This economy has the ability to produce at which point(s)? a. A, B b. A, B, D c. A, B, C, F, G d. C, F, G
____ 15. Refer to Figure 2-6. Inefficient production is represented by which point(s)? a. A, B b. C, D, F, G c. C, F, G d. D Figure 2-9 Panel (a) Panel (b) televisions televisions 13 13 Q 12 12 11 11 U 10 10 9 9 8 8 7 7 S 6 6 R 5 5 4 4 3 3 2 2 1 1 T 1 2 3 4 5 6 radios 1 2 3 4 5 6 7 8 9 10 radios
____ 16. Refer to Figure 2-9, Panel (a). The opportunity cost of one television is highest when the economy produces a. 0 televisions. b. 6 televisions. c. 10 televisions. d. 12 televisions.
____ 17. Positive statements are a. prescriptive.
b. claims about how the world should be.
c. claims about how the world is.
d. made by economists speaking as policy advisers.
____ 18. Which of the following is an example of a positive, as opposed to normative, statement?
a. Income tax rates should not have been cut as they were a few years ago.
b. The quantity of money has grown too slowly in recent years.
c. When the quantity of money grows rapidly, inflation is a predictable consequence.
d. All of the above are positive statements. Figure 2-13 price of a dozen roses 40 35 30 25 A C 20 B 15 10 5 1 2 3 4 5 6 7 8 9 10 dozens of roses
____ 19. Refer to Figure 2-13. The movement from point A to point B is a(n) a. shift of the demand curve.
b. indication of a change in preferences for roses.
c. movement along the demand curve.
d. indication of an increase in income.
____ 20. Refer to Figure 2-13. The movement from point B to point C could have been caused by a. inflation. b. a change in income.
c. a change in the price of roses.
d. a change in the cost of producing roses. II.
There is one mistake in each of the following sentences. Find and correct them 1.
Economics is the study of how society allocates its unlimited resources. 2.
If wages for accountants rose, then accountants’ leisure time would have a lower opportunity cost. 3.
A rational decisionmaker takes an action if and only if the marginal cost exceeds the marginal benefit 4.
Efficiency means everyone in the economy should receive an equal share of the goods and services produced. 5.
The government can potentially improve market outcomes if market inequalities or market equilibrium exists 6.
Economic models include many details to allow us to see what is truly important. 7.
In the circular-flow diagram, firms own the factors of production and use them to produce goods and services. Figure 2-14 8.
Refer to Figure 2-14. If this economy uses all its resources in the dishwasher industry, it
produces 35 dishwashers and 75 doghouses. 9.
Refer to Figure 2-14. The opportunity cost of moving from point A to point D is 5 dishwashers. 10.
Refer to Figure 2-14. The opportunity cost of an additional doghouse decreases as more doghouses are produced. III. Short Answer 11.
1. The prairie dog has always been considered a problem for American cattle ranchers. They dig holes that
cattle and horses can step in, and they eat grass necessary for cattle. Recently, ranchers have discovered
that there is a demand for prairie dogs as pets. In some areas, prairie dogs can sell for as high as $150
each. Cattlemen are now fencing off prairie dog towns on their land so these towns will not be disturbed by their cattle.
Draw a rancher’s production possibilities frontier showing increasing opportunity cost of cattle production
in terms of prairie dog production. Using a separate graph for each situation, show what would happen to
the initial production possibilities frontier in each of the following situations:
a. The outcome is efficient, with ranchers choosing to produce equal numbers of cattle and prairie dogs.
b. As a protest against the government introducing the gray wolf back into the wild in their
state, ranchers decide to withhold 25 percent of the available grassland for grazing.
c. The price of prairie dogs increases to $200 each, so ranchers decide to allot additional land for prairie dogs.
d. The government grants new leases to ranchers, giving them 10,000 new acres of grassland each for grazing.
e. A drought destroys most of the available grass for grazing of cattle, but not for prairie
dogs since they also eat plant roots.
2. Draw a production possibilities frontier showing increasing opportunity cost of hammers in terms of horseshoes.
a. On the graph, identify the area of feasible outcomes and the area of infeasible outcomes.
b. On the graph, label a point that is efficient and a point that is inefficient.
c. On the graph, illustrate the effect of the discovery of a new vein of iron ore, a resource
needed to make both horseshoes and hammers, on this economy.
d. On a second graph, illustrate the effect of a new computerized assembly line in the
production of hammers on this economy.
3. Identify each of the following topics as being part of microeconomics or macroeconomics:
a. the impact of a change in consumer income on the purchase of luxury automobiles
b. the effect of a change in the price of Coke on the purchase of Pepsi
c. the impact of a war in the Middle East on the rate of inflation in the United States
d. factors influencing the rate of economic growth
e. factors influencing the demand for tractors f.
the impact of tax policy on national saving
g. the effect of pollution taxes on the U.S. copper industry
h. the degree of competition in the cable television industry i.
the effect of a balanced-budget amendment on economic stability j.
the impact of deregulation on the savings and loan industry
4. Use the following graph to answer the following questions.
a. How would point J be represented as an ordered pair?
b. What type of curve is this?
c. Does this curve show a positive or negative correlation between price and quantity?
d. Compute the slope of D1 between points J and L.
e. What is the slope of D1 between points L and N? Why would you not have to calculate this answer? f.
What is it called if we move from D1 to D2?
g. How do you know that the slope of D2 is the same as the slope of D1? price 40 36 32 28 J K 24 20 L M 16 12 N 8 4 D1 D2 10 20 30 40 50 60 70 80 quantity TUTORIAL 2:
THE MARKET FORCES, SUPPLY AND DEMAND
Coverage: Chapter 4 I. Multiple Choice
Identify the choice that best completes the statement or answers the question. ____
1.In a competitive market, the quantity of a product produced and the price of the product are determined by a. a single buyer. b. a single seller.
c. one buyer and one seller working together.
d. all buyers and all sellers. ____
2. Which of the following is not a characteristic of a perfectly competitive market?
a. Different sellers sell identical products. b. There are many sellers.
c. Sellers must accept the price the market determines.
d. All of the above are characteristics of a perfectly competitive market. ____
3. Which of the following is not a characteristic of a perfectly competitive market?
a. Sellers set the price of the product. b. There are many sellers.
c. Buyers must accept the price the market determines.
d. All of the above are characteristics of a perfectly competitive market. ____
4. The law of demand states that, other things equal,
a. when the price of a good falls, the demand for the good rises.
b. when the price of a good rises, the quantity demanded of the good rises.
c. when the price of a good rises, the demand for the good falls.
d. when the price of a good falls, the quantity demanded of the good rises. Table 4-1 Price Aaron’s Angela’s Austin’s Alyssa’s Quantity Quantity Quantity Quantity Demanded Demanded Demanded Demanded $0.00 20 16 4 8 $0.50 18 12 6 6 $1.00 14 10 2 5 $1.50 12 8 0 4 $2.00 6 6 0 2 $2.50 0 4 0 0 ____
5. Refer to Table 4-1. If these are the only four buyers in the market, then the market quantity demanded at a price of $2 is a. 0 units. b. 3.5 units. c. 6 units. d. 14 units. Table 4-2 Price Audrey’s Bob’s Chuck’s Dottie’s Quantity Quantity Quantity Quantity Demanded Demanded Demanded Demanded $12 2 1 3 4 $10 4 4 4 5 $8 6 7 5 6 $6 8 8 4 7 $4 10 9 3 8 $2 12 10 2 9 ____
6. Refer to Table 4-2. Whose demand does not obey the law of demand? a. Audrey’s b. Bob’s c. Chuck’s d. Dottie’s ____
7. Which of the following events would cause a movement upward and to the left along the demand curve for olives?
a. The number of buyers of olives decreases.
b. Consumer income decreases, and olives are a normal good.
c. The price of pickles decreases, and pickles are a substitute for olives. d. The price of olives rises. ____
8. You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been
wiped out by drought, and that this will cause the price of peanuts to double by the end of the year. As a result,
a. your demand for peanut butter will increase, but not until the end of the year.
b. your demand for peanut butter increases today.
c. your demand for peanut butter decreases as you look for a substitute good.
d. your demand for peanut butter shifts left today. Figure 4-2 price A P B P' D Q Q' quantity ____
9. Refer to Figure 4-2. The movement from point A to point B on the graph shows a. a decrease in demand. b. an increase in demand.
c. a decrease in quantity demanded.
d. an increase in quantity demanded. Figure 4-4 Panel (a) Panel (b) price price P' P D D' D Q' Q quantity quantity
____ 10. Refer to Figure 4-4. The graphs show the demand for cigarettes. In Panel (b), the arrows are consistent
with which of the following events?
a. The price of cigarettes increased.
b. A tax was placed on cigarettes.
c. The prohibition of cigarette advertisements on television.
d. Tobacco and marijuana are complements and the price of marijuana decreased.
____ 11. A movement downward and to the left along a supply curve is called a. an increase in supply. b. a decrease in supply.
c. a decrease in quantity supplied.
d. an increase in quantity supplied.
____ 12. An increase in the price of oranges would lead to
a. an increased supply of oranges.
b. a reduction in the prices of inputs used in orange production.
c. an increased demand for oranges.
d. a movement up and to the right along the supply curve for oranges.
____ 13. What will happen in the rice market now if sellers expect higher rice prices in the near future?
a. The supply of rice will increase.
b. The supply of rice will decrease.
c. The supply of rice will be unaffected.
d. The demand for rice will decrease.
____ 14. In a given market, how are the equilibrium price and the market-clearing price related? a. There is no relationship. b. They are the same price.
c. The market-clearing price exceeds the equilibrium price.
d. The equilibrium price exceeds the market-clearing price.
____ 15. If there is a shortage of farm laborers, we would expect
a. the wage of farm laborers to increase.
b. the wage of farm laborers to decrease.
c. the price of farm commodities to decrease.
d. a decrease in the demand for substitutes for farm labor. Table 4-7
The demand schedule below pertains to sandwiches demanded per week. Price Charlie’s Maxine’s Quinn’s Quantity Quantity Quantity Demanded Demanded Demanded $3 3 4 3 $5 1 2 x
____ 16. Refer to Table 4-7. Suppose Charlie, Maxine, and Quinn are the only demanders of sandwiches. Also suppose the following: • x = 2
• the current price of a sandwich is $3.00
• the market quantity supplied of sandwiches is 4
• the slope of the supply curve is 2 Then
a. there is currently a shortage of 6 sandwiches and the equilibrium price of a sandwich is less than $3.00.
b. there is currently a shortage of 6 sandwiches and the equilibrium price of a sandwich is $5.00.
c. there is currently a surplus of 6 sandwiches and the equilibrium price of a sandwich is less than $3.00.
d. there is currently a surplus of 6 sandwiches and the equilibrium price of a sandwich is $5.00. Figure 4-11 price 20 S 18 16 14 12 10 8 6 4 2 D 1 2 3 4 5 6 7 8 9 10 quantity
____ 17. Refer to Figure 4-11. At a price of $4, which of the following is correct?
a. there is a surplus of 3 units
b. there is a surplus of 6 units
c. there is a shortage of 3 units
d. there is a shortage of 6 units Figure 4-13
The diagram below pertains to the supply of paper in university markets. price SA y SB x quantity
____ 18. Refer to Figure 4-13. All else equal, the return of college students to campus in the fall would cause a move a. from x to y. b. from y to x. c. from SA to SB. d. from SB to SA.
____ 19. If the supply of a product increases, then we would expect
a. equilibrium price to increase and equilibrium quantity to decrease.
b. equilibrium price to decrease and equilibrium quantity to increase.
c. equilibrium price and equilibrium quantity both to increase.
d. equilibrium price and equilibrium quantity both to decrease.
____ 20. Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?
a. an increase in the price of wool shirts and a decrease in the price of raw cotton
b. a decrease in the price of wool shirts and a decrease in the price of raw cotton
c. an increase in the price of wool shirts and an increase in the price of raw cotton
d. a decrease in the price of wool shirts and an increase in the price of raw cotton II.
There is one mistake in each of the following sentences. Find and correct them 1.
A movement upward and to the left along a given demand curve is called a decrease in demand. 2.
When Mario's income decreases, he buys more pasta. For Mario, pasta is a normal good. 3.
Baseballs and baseball bats are substitute goods. 4.
A decrease in the price of a product and an increase in the number of buyers in the market affect
the demand curve in the same way. 5.
Most studies have found that tobacco and marijuana are substitutes 6.
An increase in the price of ink will shift the supply curve for pens to the right 7.
When a seller expects the price of its product to decrease in the future, the seller's supply curve shifts left now. 8.
Price will rise to eliminate a surplus. 9.
A decrease in supply will cause an increase in price, which will cause a decrease in demanded. 10.
The actions of buyers and governments naturally move markets toward equilibrium. III. Short Answer
Problem 1: Explain each of the following statements using supply-and-demand diagrams.
a. “When a cold snap hits Florida, the price of orange juice rises in supermarkets throughout the country.”
b. “When the weather turns warm in New England every summer, the price of hotel rooms in
Caribbean resorts plummets.”
c. “When a war breaks out in the Middle East, the price of gasoline rises, and the price of a used Cadillac falls.”
Problem 2: The following table gives the daily supply and demand for hot dogs at a sporting event: Price, $ Quantity demanded Quantity supplied 2.1 800 7200 1.8 1,600 4,800 1.6 2,400 2,400 1.4 3,200 800 1.2 4,100 200
a. What is the equilibrium price of hot dog? What make you think so?
b. If the organizers of the sporting event decide to set the price at $1.8, how many hot dogs will be sold?
c. The statement “In economics, normal good is the name for a good which a normal individual can
afford” is True or False? Explain
d. What is the law of demand? Over the last two decades, tuition fees at Purdue University have
increased by 50%. At the same time, the number of students enrolled has increased from 22,000
to over 35,000. Does this example demonstrate that the Law of Demand is false? Explain why or why not. Use graphs. Problem 3
Consider the market for backpacks at Hunter College. Suppose the supplycurve is:QS= 2P
And the demand curve is:QD= 100 - 3P
a. Draw the supply and demand curves on a graph.
b. Solve for the equilibrium price and quantity.
c. Suppose there is a rise in the student population at Hunter, and thedemand for backpacks changes
to: QD= 200 - 3P. Draw the new demand curve on your original graph.
d. Suppose the price is still at the previous equilibrium level. Then, willthere be a shortage or a
surplus? How big will the shortage or surplus be?
e. Solve for the new equilibrium price and quantity. Problem 4
Consider the market for apple juice. In this market, the supply curve is given by QS = 10PJ − 5PA and the
demand curve is given by QD = 100 − 15PJ + 10PT , where J denotes apple juice, A denotes apples, and T denotes tea.
a. Assume that PA is fixed at $1 and PT = 5. Calculate the equilibrium price and quantity in the apple juice market.
b. Suppose that a poor harvest season raises the price of apples to PA = 2. Find the new equilibrium
price and quantity of apple juice. Draw a graph to illustrate your answer.
c. Suppose PA = 1 but the price of tea drops to PT = 3. Find the new equilibrium price and quantity of apple juice. (d)
TUTORIAL 3: ELASTICITY
Coverage: Chapter 5 I. Multiple Choice
Identify the choice that best completes the statement or answers the question. Table 5-2
The following table shows a portion of the demand schedule for a particular good at various levels of income. Quantity Demanded Quantity Demanded Quantity Demanded Price (Income = $5,000) (Income = $7,500) (Income = $10,000) $24 2 3 4 $20 4 6 8 $16 6 9 12 $12 8 12 16 $8 10 15 20 $4 12 18 24 ____
1. Refer to Table 5-2. Using the midpoint method, when income equals $5,000, what is the price elasticity of demand between $8 and $12? a. 0.56 b. 0.75 c. 1.33 d. 1.80 ____
2. For which of the following goods is demand probably most inelastic? a. camcorders b. insulin c. apples
d. devices that remove cores from apples ____
3. Demand is said to be inelastic if
a. buyers respond substantially to changes in the price of the good.
b. demand shifts only slightly when the price of the good changes.
c. the quantity demanded changes only slightly when the price of the good changes.
d. the price of the good responds only slightly to changes in demand. ____
4. If demand is price inelastic, then
a. buyers do not respond much to a change in price.
b. buyers respond substantially to a change in price, but the response is very slow.
c. buyers do not alter their quantities demanded much in response to advertising, fads, or general changes in tastes.
d. the demand curve is very flat. ____
5. Suppose the price of Twinkies decreases from $1.45 to $1.25 and, as a result, the quantity of Twinkies
demanded increases from 2,000 to 2,200. Using the midpoint method, the price elasticity of demand for
Twinkies in the given price range is a. 2.00. b. 1.55. c. 1.00. d. 0.64. ____
6. When demand is perfectly inelastic, the price elasticity of demand
a. is zero, and the demand curve is vertical.
b. is zero, and the demand curve is horizontal.
c. approaches infinity, and the demand curve is vertical.
d. approaches infinity, and the demand curve is horizontal. ____
7. In which of these instances is demand said to be perfectly inelastic?
a. An increase in price of 2% causes a decrease in quantity demanded of 2%.
b. A decrease in price of 2% causes an increase in quantity demanded of 0%.
c. A decrease in price of 2% causes a decrease in total revenue of 0%.
d. The demand curve is horizontal. ____
8. Suppose that 50 candy bars are demanded at a particular price. If the price of candy bars rises from that
price by 5 percent, the number of candy bars demanded falls to 48. Using the midpoint approach to
calculate the price elasticity of demand, it follows that the
a. demand for candy bars in this price range is unit elastic.
b. price increase will decrease the total revenue of candy bar sellers.
c. price elasticity of demand for candy bars in this price range is about 1.22.
d. price elasticity of demand for candy bars in this price range is about 0.82. ____
9. If demand is price inelastic, then when price rises, a. total revenue will fall. b. total revenue will rise.
c. total revenue will remain unchanged.
d. total revenue may rise, fall, or remain unchanged. More information is need to determine
the change in total revenue with certainty.
____ 10. The cross-price elasticity of demand can tell us whether goods are a. normal or inferior. b. elastic or inelastic. c. luxuries or necessities.
d. complements or substitutes.
____ 11. A key determinant of the price elasticity of supply is the
a. number of close substitutes for the good in question. b. definition of the market. c. length of the time period.
d. extent to which buyers alter their quantities demanded in response to changes in their incomes. Scenario 5-1
The supply of aged cheddar cheese is inelastic and the supply of bread is elastic. Both goods are
considered to be normal goods by a majority of consumers. Suppose that a large income tax increase
decreases the demand for both goods by 10%.
____ 12. Refer to Scenario 5-1. The price elasticity of supply for bread could be a. -1. b. 0. c. 0.5. d. 1.5.
____ 13. If a 25% change in price results in a 40% change in quantity supplied, then the price elasticity of supply is
a. 0.63, and supply is elastic.
b. 0.63, and supply is inelastic.
c. 1.60, and supply is elastic.
d. 1.60, and supply is inelastic.
____ 14. If the quantity supplied is the same regardless of price, then supply is a. elastic. b. perfectly elastic. c. perfectly inelastic. d. inelastic.
____ 15. If sellers do not adjust their quantities supplied at all in response to a change in price,
a. advances in technology must be prevalent.
b. the time period under consideration must be very long.
c. supply is perfectly elastic.
d. supply is perfectly inelastic. Scenario 5-3
Milk has an inelastic demand and beef has an elastic demand. Suppose that a mysterious increase in
bovine infertility decreases both the population of dairy cows and the population of beef cattle by 50 percent.
____ 16. Refer to Scenario 5-3. The equilibrium quantity will
a. increase in the milk market and increase in the beef market.
b. increase in the milk market and decrease in the beef market.
c. decrease in the milk market and increase in the beef market.
d. decrease in the milk market and decrease in the beef market.
____ 17. The discovery of a new hybrid wheat would increase the supply of wheat. As a result, wheat farmers
would realize an increase in total revenue if
a. the supply of wheat is elastic.
b. the supply of wheat is inelastic.
c. the demand for wheat is inelastic.
d. the demand for wheat is elastic.
____ 18. There are fewer farmers in the United States today than 200 years ago because of
a. increases in farm technology.
b. increased government regulations in farming.
c. an elastic demand for food.
d. environmental programs designed to reduce soil erosion.