Suppose That the Price of Flour Used to Produce Bagels

question 120

Multiple Choice

Suppose that the price of flour used to produce bagels increases. Hence the equilibrium price of a bagel ________, and the equilibrium quantity ________.

• A) rises; decreases
• B) falls; decreases
• C) does not change; does not change
• D) falls; increases
• E) rises; increases

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Definitions:

Facilitates Trade

Actions or policies designed to make trade between countries or parties easier, typically through reducing barriers such as tariffs and quotas.

Barter

The direct exchange of one product for another without using money.

Medium Of Exchange

Anything that is widely accepted as a means for the payment of goods and services and repayment of debts.

Opportunity Cost

Represents the value of the best alternative that must be given up in order to pursue a certain action or decision.