Economists disagree on most economic issues facing an economy

Which is the most likely effect upon the market for cotton of an increase in production costs due to higher oil prices?

A) A decrease in demand and hence a decrease in both the price of cotton and the quantity exchanged. B) A decrease in supply and hence a decrease in both the price of cotton and the quantity exchanged. C) A decrease in supply and hence an increase in the price of cotton and a decrease in the quantity exchanged. D) A decrease in both supply and demand and hence a decrease in the quantity exchanged but no predictable change in the price of cotton.

Suppose that you have returned from your fishing expedition with 20,000 fish. The market price is $3 per fish. Your average fixed cost was $1 and your total variable cost was $5,000 . If the price jumps to $3.50 before you sell your first fish, how much extra profit, if any, do you earn?

a. c and d. b. Extra profit is zero. c. Extra profit is enough to cover half of the fixed cost of your next trip. d. Extra profit is enough to cover all of the variable costs of your next two trips. e. Extra profit is $45,000.