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Solved: Explain whether each of the following events represents (i) a change in supply
Chapter 0, Problem 1(choose chapter or problem)
Explain whether each of the following events represents (i) a change in supply or (ii) a movement along the supply curve.
a. During a real estate boom that causes house prices to rise, more homeowners put their houses up for sale.
b. Many strawberry farmers open temporary roadside stands during harvest season, even though prices are usually low at that time.
c. Immediately after the school year begins, fewer young people are available to work. Fast-food chains must raise wages, which represent the price of labor, to attract workers.
d. Many construction workers temporarily move to areas that have suffered hurricane damage, lured by higher wages.
e. Since new technologies have made it possible to build larger cruise ships (which are cheaper to run per passenger), Caribbean cruise lines have offered more cabins, at lower prices, than before.
Questions & Answers
QUESTION:
Explain whether each of the following events represents (i) a change in supply or (ii) a movement along the supply curve.
a. During a real estate boom that causes house prices to rise, more homeowners put their houses up for sale.
b. Many strawberry farmers open temporary roadside stands during harvest season, even though prices are usually low at that time.
c. Immediately after the school year begins, fewer young people are available to work. Fast-food chains must raise wages, which represent the price of labor, to attract workers.
d. Many construction workers temporarily move to areas that have suffered hurricane damage, lured by higher wages.
e. Since new technologies have made it possible to build larger cruise ships (which are cheaper to run per passenger), Caribbean cruise lines have offered more cabins, at lower prices, than before.
ANSWER:Step 1 of 3
Supply curves either move or shift when any change occurs in the determinants of supply.