Question

 The following calculator 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.

 Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.

 Consider the previous graph. Suppose that the price of a sedan decreases from $29,000 to $24,000. This would cause the _______ of sedans to decrease, which is reflected on the graph by a

 the supply curve.

 Following a technological decline-for example, a decrease in the speed with which robots can attach bolts to cars-there is a _______ the supply curve because the technological decline makes cars _______ .

Answer 1

Suppose the price of a sedan decreases from $29,000 to $24,000 . This would cause the quantity supplied of sedan to decrease which is reflected on the graph by a downward movement along the supply curve.

Following a technological decline- a decline in the speed with which robots can attach bolts to cars-there is a leftward shift of the supply curve because the technological decline make cars expensive to build. Because supply curve shows the relationship between price and quantity supplied of sedans , and here slower robots produce fewer automobiles each month ,which results in lower quantity supplied at each price level . So, this can be shown by the leftward shift in the supply curve.