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: The federal government restricts the amount of agricultural products that can be imported. (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: The federal government restricts the amount of agricultural products that can be imported. (See Figure 29.4.)
A)A. 
B)B. 
C)C. 
D)D.

Quizplus · Accepted Answer

The federal government restricting the amount of agricultural products that can be imported would decrease the supply of wheat in the United States market. This is shown by a leftward shift of the supply curve, which is represented by diagram A in Figure 28.1. As a result, the price of wheat would increase and the quantity demanded would decrease, as shown by the movement up the demand curve in diagram A.

Select the Letter of the Diagram in Figure 28