Two goods with a low cross elasticity of demand are competing in the same market.

The above figure shows the production possibility frontier for a country. Suppose the country is producing at point E. What would be the opportunity cost to increase the production of wine to 9 thousand bottles?

A) 12 tons of rice B) 15 thousand bottles of wine C) 9 thousand bottles of wine D) 3 tons of rice E) Nothing, it is a free lunch.

What will be the principal and most immediate effect on the supply or demand for raw cotton grown in the United States if the price of fertilizer used in cotton production increases?

A) Decrease in demand B) Decrease in supply C) Increase in demand D) Increase in supply