A bumper crop of farm products causes:
1)
only a slight decline in the price of farm products because the demand for farm products is income inelastic.
2)
a large decline in the price of farm products because the demand for farm products is price inelastic.
3)
only a slight decline in the price of farm products because the demand for farm products is income elastic.
4)
a large decline in the price of farm products because the demand for farm products is price elastic.
To answer this question, we need to understand the concepts of price elasticity of demand and income elasticity of demand.
1) Price elasticity of demand measures how responsive the quantity demanded of a product is to changes in its price. If the demand for farm products is income inelastic, it means that a change in price will have only a slight impact on the quantity demanded. Therefore, a bumper crop of farm products would only cause a slight decline in the price of farm products. So, option 1 is the correct answer.
2) If the demand for farm products is price inelastic, it means that a change in price will have a relatively small impact on the quantity demanded. However, in this case, a bumper crop of farm products would lead to an increase in the supply of farm products, causing a surplus in the market. To eliminate the surplus, the price would need to decrease. Therefore, option 2 is not the correct answer.
3) Income elasticity of demand measures how responsive the quantity demanded of a product is to changes in income. If the demand for farm products is income elastic, it means that a change in income will have a significant impact on the quantity demanded. However, a bumper crop of farm products does not directly affect income levels. So, option 3 is not the correct answer.
4) Price elasticity of demand measures how responsive the quantity demanded of a product is to changes in its price. If the demand for farm products is price elastic, it means that a change in price will have a relatively large impact on the quantity demanded. Therefore, a bumper crop of farm products would cause a large decline in the price of farm products. So, option 4 is not the correct answer.
In summary, the correct answer to the question is option 1.