Compared to the free-market outcome, if the production of wheat were subsidized by the government,
A) the supply of wheat would increase.
B) the quantity supplied of wheat would increase.
C) the quantity demanded of wheat would increase.
D) all of the above would occur.
E) none of the above would occur.
D
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If a country began exporting product A and importing product B, then, as compared to the autarky (no-trade) situation, the marginal cost of product A will
A) increase. B) decrease. C) shift outward. D) shift inward. E) remain the same.
John and Mary work at a bakery. John can decorate either 10 ice-cream cakes or 4 wedding cakes; Mary can decorate either 8 ice-cream cakes or 2 wedding cakes. According to this scenario
A) the opportunity cost of decorating a wedding cake for Mary is 4 ice-cream cakes. B) the opportunity cost of decorating a wedding cake for Mary is 1/4 ice-cream cake. C) the opportunity cost of decorating a wedding cake for Mary is 2 1/2 ice-cream cakes. D) the opportunity cost of decorating a wedding cake for Mary is 2/5 ice-cream cake.