Select the letter of the diagram in Figure 28.1 that best represents the effect of each event on the United States wheat market, ceteris paribus: A bumper wheat crop in Russia results in large imports of wheat to the United States. (See Figure 29.4.)
A)A.
B)B.
C)C.
D)D.

Question

Select the letter of the diagram in Figure 28.1 that best represents the effect of each event on the United States wheat market, ceteris paribus: A bumper wheat crop in Russia results in large imports of wheat to the United States. (See Figure 29.4.)
A)A. 
B)B. 
C)C. 
D)D.

Quizplus · Accepted Answer

A bumper wheat crop in Russia resulting in large imports of wheat to the United States would increase the supply of wheat in the United States market, leading to a shift to the right in the supply curve. This would result in a decrease in the price of wheat (from P1 to P2) and an increase in the quantity demanded (from Q1 to Q2). Choice B in Figure 28.1 depicts this scenario with a shift to the right in the supply curve.

Select the Letter of the Diagram in Figure 28