Question

1) If the product is cars, and the price of steel increases, what variable is affected (KW1), and is it a move along the S curve (Qd), or a new Supply curve?

Select one or more:

a. price

b. cost of inputs

c. price expectations

d. level of technology

e. new curve

f. along the curve

2) If the product is grapes, and California grape pickers strike for higher wages, what variable is affected, and is it a move along the S curve (Qd), or a new Supply curve?

Select one or more:

a. price

b. cost of inputs

c. price expectations

d. level of technology

e. new curve

f. along the curve

3) If the product is tires, and Sidney Snerdley invents cheap new way of producing rubber from old hip waders, what variable is affected, and is it a move along the S curve (Qd), or a new Supply curve?

Select one or more:

a. price

b. cost of inputs

c. price expectations

d. level of technology

e. new curve

f. along the curve

4) If the product is bananas, and due to genetic mutation, monkey population in South America explodes, what variable is affected, and is it a move along the S curve (Qs), or a new Supply curve?

Select one or more:

a. price

b. cost of inputs

c. price expectations

d. level of technology

e. new curve

f. along the curve

5) If the cost of peanuts skyrockets, what variable is affected in the product peanut butter? Is it a move along the S curve (Qd), or a new Supply curve?

Select one or more:

a. price

b. cost of inputs

c. price expectations

d. level of technology

e. new curve

f. along the curve

Answer 1

Q1: The price of steel increases, this is an exogenous variable hence the supply curve will shift. The following options will be true: A, B , E

Q2: The wage demanded increases, this is an exogenous variable hence the supply curve will shift. The following options will be true: A, B , E

Q3: Sidney Snerdley invents cheap new way of producing rubber from old hip waders, this is an exogenous variable hence the supply curve will shift. The following options will be true: A, D, E

Q4: Due to genetic mutation, monkey population in South America explodes. This will reduce the supply and this is an exogenous variable hence the supply curve will shift. The following options will be true: A, E

Q5: If the cost of peanuts skyrockets, this is an exogenous variable hence the supply curve will shift. The following options will be true: A, B, E