Harvest Shortfall and Price Impact

An economic observation from the 17th century noted that a 10% shortfall in a nation's corn harvest could lead to a 30% increase in its price. Which of the following statements best analyzes the underlying economic principle behind this disproportionate price change?

Harvest Surplus and Price Prediction

Two individuals, Alex and Ben, are choosing between combinations of apples and oranges. Their preferences are represented by indifference curves. Although the shapes of their indifference curves are identical, the utility levels assigned to them are different. For Alex, three of his curves are labeled U=10, U=20, and U=30. For Ben, the corresponding, identically-shaped curves are labeled U=5, U=100, and U=1000. Based on this information, what can be concluded about their preferences?

Applicability of a Historical Economic Principle

A 17th-century economic observation noted a specific, non-linear relationship between the size of a corn harvest and its market price. It stated that a 10% shortfall in the harvest would lead to a 30% price increase, while a 20% shortfall would lead to an 80% price increase. Imagine you are a merchant in that era and you learn that the upcoming harvest is expected to be 20% below normal. Based on this observation, what price change should you anticipate?

A 17th-century economic observation noted that a 10% shortfall in a nation's corn harvest could lead to a 30% increase in its price. Based on the economic reasoning behind this observation, it is logical to conclude that a similar 10% shortfall in the supply of a luxury good, like imported spices, would produce a similarly large price increase.

Energy Shift and Economic Growth

A 17th-century government, observing that a small (e.g., 10%) shortfall in the national grain harvest leads to a very large (e.g., 30%) price increase and public unrest, is considering policy interventions. Based on the economic principle underlying this observation, which of the following policies would be most effective at stabilizing the price of grain during a poor harvest, and why?

A 17th-century economic observation noted that a small shortfall in the harvest of a staple food crop led to a disproportionately large increase in its price. Based on this principle, match each of the following goods with the most likely price change you would expect from a uniform 10% reduction in its market availability during that era.