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JAMB Economics 1997 Question 24

Question 24

Agriculture

The suggestion that peasants in Africa have backward-bending supply curves of output implies that their response to an increase in the price of their crops will be to

  1. A.increase their output
  2. B.decrease their output
  3. C.keep their output constant
  4. D.hoard their output.
Show the answer and explanation

Answer: B (decrease their output)

Explanation

A backward-bending supply curve means that after a point, a higher price leads to less being supplied, since peasants can reach their income target by selling less.