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April 25, 2015

Homework Help: Microeconomics

Posted by Tami on Friday, July 20, 2007 at 9:41am.

The supply of meat in Russia increases, causing meat prices to fall. Lower prices always means that Russian households spend more on meat.

There is something wrong with this sentence. What is wrong? The work ALWAYS should not abe in here. Just because prices of meat fall does not mean that families spend more on meat.

A fall in the price of meat will cause a larger quantity of meat to be bought in most cases, but the total amount spent may be less.

It is often the case in agriculture that a very large crop or meat production will cause prices to fall so much that farmers end up making less money.

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