MINDTAP From Cengage Homework (Ch 04) c Back to Assignment Attempts: 7. Movement

Question

MINDTAP From Cengage Homework (Ch 04) c Back to Assignment Attempts: 7. Movements along versus shifts of supply curves Consider the market supply of wine. Average: 1 Complete the following table by indicating whether an event will cause a movement along the supply curve for wine or a shift of the supply curve for wine, holding all else constant. Event An increase in the price of wine An increase in the price of grapes (used in the production of wine) A change in expectations about the future price of wine Movement Along Shift Grade It Now Save & Continue Continue without saving

Explanation / Answer

a) An increase in the price of wine will cause a movement along the supply curve.

b) An increase in the price of grapes will cause a shift in the supply curve.

c) Change in the expectation in the future price will increase or decrease the supply and it will shift the supply curve.

(the basic idea behind this is any change in the current price will cause a movement along the curve and any change in the factors other than price will shift the curve.)

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