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: Relaxed immigration laws lead to lower labor costs. (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: Relaxed immigration laws lead to lower labor costs. (See Figure 29.4.)
A)A. 
B)B. 
C)C. 
D)D.

Quizplus · Accepted Answer

Relaxed immigration laws lead to lower labor costs, which would result in a decrease in production costs for wheat farmers. This would shift the supply curve (S) to the right, leading to a lower equilibrium price (P) and higher equilibrium quantity (Q). This is represented by diagram B in Figure 28.1.

Select the Letter of the Diagram in Figure 28