Final answer:
The price of wheat being much greater than the price of corn is indeed true, based on the recent trend of converging prices and the preference for corn over wheat due to higher yields.
Step-by-step explanation:
The statement "If this consumer solves his consumer problem and chooses basket B, the price of wheat is much greater than the price of corn." is True.
Historically, wheat prices have been higher than corn prices due to factors like wheat's lower yield per acre. However, in recent years, the prices of wheat and corn have been converging, and the price gap has narrowed significantly. This has led to the production of higher yield per acre of corn making more business sense.
Therefore, if a consumer chooses basket B where the price of wheat is much greater than the price of corn, it aligns with the recent trend of converging prices and the preference for corn over wheat due to higher yields.
It is false to assume that choosing basket B implies wheat prices are much greater than corn prices, as recent market trends showed these prices converging. Other factors also play a role in crop selection and consumer choices, not simply the comparative prices of wheat and corn.
Regarding the statement "If this consumer solves his consumer problem and chooses basket B, the price of wheat is much greater than the price of corn," it is false if we infer from historical trends and market behaviors that wheat and corn prices have been converging. Since the competition between corn and wheat is close, as evidenced by the difference in price being a mere 71 cents per bushel as reported in April 2013, a choice of one over the other does not necessarily indicate a significant difference in price. Moreover, decisions to grow certain crops are influenced by various factors, such as yield per acre and current market prices, which can fluctuate and are subject to changes in consumer demand and agricultural conditions.
According to Erik Younggren, president of the National Association of Wheat Growers, the preference for corn could continue "until wheat prices rise" indicating that the choice of a particular crop or product depends on the price, among other variables. A consumer may choose a bundle of goods based on personal preferences, relative prices, and budget constraints; the choice does not directly reveal the prices of the goods in the market.