The above figure shows supply and demand curves for milk. In an effort to help farmers, the government passes a law that establishes a $3 per gallon price support. The loss in social welfare resulting from this price support equals

Explain how the market supply curve is derived. Does the law of supply apply to the market supply curve?

What will be an ideal response?

When the foreign price level falls, domestic goods become more expensive relative to foreign goods, causing domestic net exports and aggregate demand to fall

a. True b. False Indicate whether the statement is true or false