Attempts: Average: /2 5. A change in supply versus a change in quantity supplied
ID: 1150726 • Letter: A
Question
Attempts: Average: /2 5. A change in supply versus a change in quantity supplied The following calculator shows the supply curve for sedans in an imaginary market. For simplicity, assume that all sedans are identical and sell for the same price. Two factors that affect the supply of sedans are the level of technical knowledge-in this case, the speed with which manufacturing robots can fasten bolts, or robot speed and the wage rate that auto manufacturers must pay their employees. Initially, the graph shows the supply curve when robots can fasten 2,500 boits per hour and autoworkers earn $25 per hour Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly Graph Input Tool Supply for Sedans 50 Price of a Sedan 20 Thousands of doilars) Quantity Supplied Sedans per monrh) Supply 225 30 SUPPLY SHIFTERS 20 Robot Speed (Bolts per hour) Autoworker Wage Doliars per hour) 2500 25 10 0 100 200 300 400 500 600 700 800 900 QUANTITY (Sedans per month) Consider the previous graph. Suppose that the price of a sedan increases from $20,000 to $25,000. This would cause the the graph by a of sedans to increase, which is reflected on the supply curve. Following a technological improvement for example, an increase in the speed with which robots can attach bolts to cars-there is a because the technological improvement makes cars the supply curve Grade It Now Save & Continue Continue without savingExplanation / Answer
1.
Correct Answer:
Supply or quantity supplied of sedan to increase
Movement along the supply curve
The quantity supplied, increases with increase in prices. Since price is the determinant of supply, so the movement will be along the supply curve.
2.
Correct Answer:
Rightward shift of the supply curve
More Cheaper to produce or more rapidly produce
Due to improvement in technology, there is rightward shift in the supply curve as cost of producing cars comes down. So, productivity level rises and cars become cheaper. It makes rightward shift in the supply curve.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.