9. Which circumstance is most likely to cause a farmer to store soybeans for future sale instead of selling them right after harvest?


The government imposes an excise tax effective next year.
The government lifts restrictions on the importation of soybeans.
Inflation is running at 25 percent.
A new technology decreases the chance of rot.

help!

To determine which circumstance is most likely to cause a farmer to store soybeans for future sale instead of selling them right after harvest, we need to analyze each option:

1. The government imposes an excise tax effective next year: This scenario can create uncertainty for the farmer as they might not know the exact impact of the tax on their profits. In response, the farmer could decide to store the soybeans, hoping for a more favorable market condition in the future or until the tax takes effect.

2. The government lifts restrictions on the importation of soybeans: When restrictions are lifted on importing soybeans, it implies that more soybeans will enter the market. The increased supply could lead to a drop in prices. To avoid selling their soybeans at a lower price, the farmer may choose to store them and wait for the market to stabilize.

3. Inflation is running at 25 percent: High inflation usually drives up prices, including the prices of agricultural commodities like soybeans. In this scenario, the farmer might choose to sell their soybeans immediately to benefit from the higher prices rather than incurring the cost of storing them.

4. A new technology decreases the chance of rot: With the introduction of a technology that reduces the risk of soybeans rotting, the farmer will have higher confidence in storing the soybeans. The reduced risk of spoilage can allow the farmer to store the soybeans for a longer period, waiting for better market conditions or higher prices.

Considering the options above, the circumstance most likely to cause a farmer to store soybeans for future sale instead of selling them right after harvest would be when the government lifts restrictions on the importation of soybeans. Increased imports would potentially lower the market price, prompting the farmer to store the soybeans until the market stabilizes.

A new technology decreases the chance of rot

Be sure you understand the meanings of these terms.

I'll be glad to check your answer. (Hint: two answers are obviously wrong.)