Shifts in Supply Worksheet Directions: For each scenario, draw the supply for the good in parentheses. Then, based on what is written in the scenario, shift the supply graph appropriately. Be sure to label the original supply curve as “S1” and the shifted supply curve as “S2” and draw arrows to show if the supply curve shifted to the right or left. Label the axes on the graph. Then, write what the determinant of supply is. 1. The summer season is approaching, and soon consumers will be heading to stores to update their winter wardrobes (winter clothes) 2. The shipping costs of cotton have decreased (cotton T-shirts). 3. New healthy restaurants open up throughout the state (healthy food). 4. A storm causes a boat transporting iPhones to be lost at sea (iPhones). 5. Laptop makers start making tablets because they hear that tablets will yield higher profits (laptops). 6. Wheat farmers switch production to corn because corn will be more profitable (corn). 7. A new tax is placed on restaurants serving foods with trans fat or high amounts of saturated fat (fast food). 8. New high-tech machines have replaced workers at a toy factory (toys). 9. High-low skirts are now considered out of style, so consumers will probably stop buying them soon (high-low skirts). 10. Many bookstores, like Borders and Barnes & Noble, have closed (books). 11. Unusually good weather has enabled farmers to produce record crops (vegetables). 12. Leather has become more expensive (leather shoes).
The Correct Answer and Explanation is :
1. The summer season is approaching, and soon consumers will be heading to stores to update their winter wardrobes (winter clothes).
- Graph: The supply of winter clothes will likely shift left (decrease) as stores prepare for warmer weather and stop stocking up on winter clothing.
- Determinant: Changes in consumer demand (Seasonal changes affect the demand for winter clothing).
2. The shipping costs of cotton have decreased (cotton T-shirts).
- Graph: The supply of cotton T-shirts will likely shift right (increase) because lower shipping costs make production cheaper.
- Determinant: Input prices (cheaper shipping reduces production costs).
3. New healthy restaurants open up throughout the state (healthy food).
- Graph: The supply of healthy food will likely shift right (increase) as more restaurants enter the market, increasing the availability of healthy food.
- Determinant: Number of sellers (more restaurants = more supply).
4. A storm causes a boat transporting iPhones to be lost at sea (iPhones).
- Graph: The supply of iPhones will likely shift left (decrease) due to the loss of goods in transport.
- Determinant: Natural disasters (disrupt production and transportation).
5. Laptop makers start making tablets because they hear that tablets will yield higher profits (laptops).
- Graph: The supply of laptops will likely shift left (decrease) because producers are reallocating resources to produce tablets instead.
- Determinant: Changes in technology and profitability (producers shift to more profitable goods).
6. Wheat farmers switch production to corn because corn will be more profitable (corn).
- Graph: The supply of corn will likely shift right (increase) as farmers switch production from wheat to corn.
- Determinant: Changes in technology or profitability (more profitable good is produced).
7. A new tax is placed on restaurants serving foods with trans fat or high amounts of saturated fat (fast food).
- Graph: The supply of fast food will likely shift left (decrease) as the new tax raises production costs.
- Determinant: Taxes (higher costs discourage production).
8. New high-tech machines have replaced workers at a toy factory (toys).
- Graph: The supply of toys will likely shift right (increase) because of improved efficiency due to new machinery.
- Determinant: Technological advancements (increases production efficiency).
9. High-low skirts are now considered out of style, so consumers will probably stop buying them soon (high-low skirts).
- Graph: The supply of high-low skirts will likely shift left (decrease) as demand for them falls.
- Determinant: Consumer preferences (style trends affect demand).
10. Many bookstores, like Borders and Barnes & Noble, have closed (books).
- Graph: The supply of books will likely shift left (decrease) as fewer bookstores exist.
- Determinant: Number of sellers (fewer sellers reduce supply).
11. Unusually good weather has enabled farmers to produce record crops (vegetables).
- Graph: The supply of vegetables will likely shift right (increase) due to the favorable weather conditions that increased crop yields.
- Determinant: Weather conditions (affecting production ability).
12. Leather has become more expensive (leather shoes).
- Graph: The supply of leather shoes will likely shift left (decrease) due to higher input prices for leather.
- Determinant: Input prices (higher cost of raw materials raises production costs).
Summary:
Supply can shift based on several factors, including changes in input prices, technology, taxes, the number of producers, and weather. The graphs show how these determinants affect the supply curve, whether by increasing or decreasing supply. For example, when costs decrease (like in the case of cotton shipping), the supply increases, shifting the curve to the right. Conversely, when external factors like taxes or storms increase production costs or reduce the availability of resources, the supply curve shifts to the left. These shifts show the dynamic nature of supply in response to real-world changes.