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Events Evaluation

Answer the following questions.

For the following events concerning the product identified, provide the following:

  1. whether the event is a change in the quantity supplied or a change in supply,
  2. if it is a change in supply, list the non-price determinate that caused the change in supply, and
  3. indicate whether the curve shifted to the right (increased supply) or left (decreased supply).
  1. New technology is developed for widget production.

    Answer: Shift to the right. Change in supply due to technology.

  2. The government places a subsidy on the production of flu vaccines.

    Answer: Shift to the right. Change in supply due to a change in taxes, government actions, and subsidies.

  3. A strike in the automobile industry begins.

    Answer: Shift to the left. Change in supply due to number of seller. With no workers, there is no product to sell. In addition, you could also state that these workers are not productive and as such, supply decreases.

  4. Farmers expect the price of soybeans to increase next month.

    Answer: Shift to the left today, as farmers wait to sell their soybeans later in the year. This is due to a change in expectations.

  5. Farm workers agree to wage cuts, lowering the cost of production of the harvest.

    Answer: Shift to the right. Change in supply due to lower resource costs.

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