1.Steel mill wage costs increase by 18 percent over a year. What is the likely e
ID: 1093502 • Letter: 1
Question
1.Steel mill wage costs increase by 18 percent over a year. What is the likely economic effect on the market for steel?
a
There is an increase in the cost of producing steel, which shifts the supply curve of steel to the right, thereby increasing the price of steel.
b
There is an increase in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel.
c
There is a decrease in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel.
d
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2.Refer to the table below. If D1 and S1 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are __________ and __________, respectively.
Price
D 1
D 2
S 1
S 2
$12
5
9
19
14
$10
8
12
17
12
$8
11
15
15
10
$6
13
18
13
8
$4
16
21
11
6
$2
18
24
9
4
There is an increase in the cost of producing steel, which shifts the supply curve of steel to the right, thereby increasing the price of steel.
b
Explanation / Answer
b.
There is an increase in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel.
.
c. $6; 13
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