The \"law of supply\" refers to the fact that, other things remaining the same,

Question

The "law of supply" refers to the fact that, other things remaining the same, when the price of a good rises a. the supply curve shifts rightward. b. the supply curve shifts leftward. 8) there is a movement down along the supply curve to a larger quantity supplied d, there is a movement up along the supply curve to a smaller larger supplied 9) Which of the following would decrease the supply of coffee? a. Harris Teeter opens a coffee shop in every store. b. College students start buying less coffee and more energy drinks as midterms approach. c. The price of coffee beans increases d. A new, more efficient and less costly coffee grinder is invented. 10) Discuss differences between the "demand curve" and "quantity demanded." Are these differences similar to the differences between the "supply curve" and "quantity sup plied"? 11) List what causes a change in demand and what causes a change in the quantity demanded. Diagrammatically, what is the difference between a "change in demand" and a "change in quantity demanded"? 12) Think about ramen noodles, which we assume is an inferior good. Draw a demand curve for ramen noodles. Now, draw a second demand curve after income goes up by 10%. 13) Come up with and explain an example of a change in demand story that relates to something observed recently.

Explanation / Answer

8. The law of supply states that other things remaining sonstant, with a rise in prices the quantity supplied rises and vice versa. An increase in price will result in upward movement along the same suppy curve and more or larger quantity will be supplied at a currently higher price.

9. The increase in the price of coffee beans which is an input to coffee, will result in lower supply as the firms will now earn less at current price.

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