Asked by Jordan Jeyachandran on Jun 16, 2024
Verified
The parity ratio initially stood at 0.5. Then after several years, the prices received by farmers doubled while the prices they paid tripled. This will bring the parity ratio to
A) 0.25.
B) 0.33.
C) 0.75.
D) 0.80.
Parity Ratio
A measure used in agriculture to compare the relative purchasing power of income from farming to a base period.
Prices Received
Prices received refer to the amount of money sellers receive for their goods and services in the market after deducting any sales discounts and allowances.
Prices Paid
The actual amount of money expended by buyers to acquire goods or services.
- Acquire knowledge of the concepts and mathematical processes related to parity, and their importance within agricultural economics.
Verified Answer
SG
Shiva GhasemiJun 17, 2024
Final Answer :
B
Explanation :
The parity ratio is calculated as the ratio of the prices received by farmers to the prices paid by them. If the prices received doubled and the prices paid tripled, the new ratio becomes (2 * original prices received) / (3 * original prices paid) = 2/3 * original parity ratio. Since the original parity ratio was 0.5, the new parity ratio is 2/3 * 0.5 = 0.33.
Learning Objectives
- Acquire knowledge of the concepts and mathematical processes related to parity, and their importance within agricultural economics.