We cannot predict the effect on the market clearing price, but know that the equilibrium quantity will increase when
A) supply increases and demand decreases.
B) supply and demand for a product simultaneously decrease.
C) supply and demand for a product simultaneously increase.
D) supply decreases and demand increases.
C
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Study the graph. Suppose this nation starts with producing all military goods. It then decides to produce a mix of civilian and military goods represented by point B. What represents the costs in military goods given up?
What will be an ideal response?
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.