Question

You are a producer of calculators. Last month, a tornado at your factory eliminated 50% of your firm’s production capability. At the same time, your compensation costs increased by 5% because of an annual pay raise. What is the consequence of these events?

Choose one or more:

A.The tornado shifts the supply to the left.

B.The tornado shifts the supply to the right.

C.The tornado does not shift the supply curve.

D.The tornado shifts the demand curve to the right.

E.The tornado shifts the demand curve to the left.

F.The tornado does not shift the demand curve.

G.The annual pay raise shifts the supply curve to the right.

H.The annual pay raise shifts the supply curve to the left.

I.The annual pay raise does not shift the supply curve.

J.The annual pay raise shifts the demand curve to the right.

K.The annual pay raise shifts the demand curve to the left.

L.The annual pay raise doesn't shift the demand curve.

Answer 1

Answer
A.The flood shifts the supply to the left.
F.The flood does not shift the demand curve.
H.The increase in healthcare costs shifts the supply curve to the left.
L. The increase in healthcare costs doesn't shift the demand curve.

these all are correct because the decrease in supply will shift supply to the left and increase in supply cost will shift supply left, and demand will not change

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Answer 2

The decrease in supply will shift supply to the left and increase in supply cost will shift supply left, and demand will not change. Thus, the correct options will be:

A, F, H and L

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