Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Question
Chapter 4, Problem 15P
To determine
(a)
Effect on the supply of corn if the
To determine
(b)
Effect on the supply of wheat if the price of corn rose.
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Suppose the following graph shows the market supply for avocados. A severe drought destroys much of the crop of avocados.
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The following graph shows the supply curve for sedans in an imaginary market. For simplicity, assume that all sedans are identical and sell for the same price. Two factors that affect the supply of sedans are the level of technical knowledge—in this case, the speed with which manufacturing robots can fasten bolts, or robot speed—and the wage rate that auto manufacturers must pay their employees. Initially, the graph shows the supply curve when robots can fasten 2,500 bolts per hour and autoworkers earn $25 per hour.
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Multiple Choice
The supply curve will shift from S1 to S2.
The supply curve will shift from S2 to S1.
There will be movement from point x to point y.
There will be movement from point y to point x.
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