#5-8 stickle Reasons for Changes in Supply Part A Read the eight newspaper headl
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#5-8
stickle Reasons for Changes in Supply Part A Read the eight newspaper headlines in igure 13.2, and record the impact, if any, of each event on the supply of cars. Use the first column to the right of the headline to show whether the event will cause a change in supply. Use the next column to record whether the change is an increase or a decrease in supply. In the third column, decide whether the supply curve shifts left or right. Finally, write the letter for the new supply curve. Use Pigure 13.1 to help you. Always start at curve B, and. move only one curve at a time. Two headlines imply that the supply of cars does not change. Figure 13.1 Supply of Foreign and Domestic Cars B C QUANTITY Figure 13.2 Supply Supply Curve Shifts New Shit? (Y/N) Shifts, Inc/Dec? Left/Right? Curve Headline 1. Auto Workers' Union Agrees to Wage Cuts 2. New Robot Technology Increases Efficiency 3. Nationwide Auto Strike Began at Midnight 4. New Import Quotas Reduce Foreign Car Imports 5. Cost of Steel Rises 6. Auto Producer Goes Bankrupt, Closes Operation 7. Buyers Reject New Models National Income Rises 2%Explanation / Answer
5. Cost of steel rises: Cost of input for making domestic cars is increased. So the supply of cars will be decreased. Supply curve will be shifted to the left. If the initial supply curve is B then the curve will be shifted to A.
6. Auto producers go bankrupt: Supply of car will be decreased. Supply curve will be shifted to the left from B to A.
7. Buyers reject new model: It will affect the demand. Supply of car will not be affected.
8. National income rises: Demand for car will be increased with more income. Supply of car will not be affected.
Headline supply shift(Y/N)? If supply shift(inc/dec) Curve shifts(left/right) New curve 5. Cost of steel rises Y Dec left A 6. Auto producers goe bankrupt Y Dec left A 7. Buyers reject new model N - - - 8. National income rises 2% N - - -Related Questions
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