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

The demand for wheat is not affected by relaxed immigration laws, but the supply curve shifts to the right due to lower labor costs. This results in an increase in the quantity supplied of wheat at each price level, causing a surplus in the market, as shown by diagram B.

Select the Letter of the Diagram in Figure 28