After a Certain Nation Changed Its Policy from One That

question 57

Multiple Choice

After a certain nation changed its policy from one that banned international trade in wheat to one that allowed international trade in wheat,the nation began importing wheat.As a result,total surplus in the wheat market increased by $10 million.Which of the following changes could have occurred as well?

• A)The price of wheat in that nation increased with the adoption of the new policy.
• B)The domestic quantity of wheat supplied increased with the adoption of the new policy.
• C)Consumer surplus in the wheat market increased by $7 million and producer surplus in the wheat market increased by $3 million.
• D)Consumer surplus in the wheat market increased by $15 million and producer surplus in the wheat market decreased by $5 million.

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Definitions:

Linear Production

A production process where inputs are combined in fixed proportions and the output level changes linearly with changes in input levels.

Labor Hours

A measure of the amount of work effort, in hours, performed by employees within a specific time period.

Normative View

An opinion or viewpoint based on what is considered to be ideal or how things should be rather than on empirical evidence.

Federal Minimum Wage

The lowest legal hourly wage that employers can pay their workers, as mandated by federal law.