Exceptionally large harvests of wheat or corn often result in farmers having lower total incomes for that season despite the increased production. economists explain this fact by saying that: a. the demand of wheat and corn is basically inelastic and so increases in output drastically reduce price and income to the farmers. b. the demand for wheat and corn is basically elastic and so increases in output drastically reduce price and income to farmers. c. farming is an inefficient industry. d. consumers have demonstrated the substitution effect and sought other foods. e. this is an example of the income effect for farmers.

Afirm wants to hire a project manager (pm) at a salary of $100,000. 30% of pms have high ability, and 70% of pms have low ability. high ability pms generate $120,000 in revenue and low ability pms generate $80,000 in revenue. in addition to differences in productivity, high and low ability pms have different outside offers. if a high ability pm is not hired by the firm, she can work for another company at a salary of $80,000. if the low ability pm is not hired by the firm, she can work for another company for $70,000. high ability pms are also able to get a project management professional (pmp) certification at a cost of $1,000. low ability pms are unable to get a pmp certification (they would fail the test). the firm is not able to observe a pm’s ability, but is able to observe and verify whether or not the pm has a pmp certificate.(a) draw the extensive form of the game.expert answer