sol_even_3.ppt

sol_even_3.ppt - Chapter 3 1. How would each of the...

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Chapter 3
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1. How would each of the following affect the U.S. market supply curve for corn? a. A new and improved crop rotation technique is discovered. Supply curve shifts to right. The improved technique leads to increase in the production of crops. a. The price of fertilizer falls. Supply curve shifts to right. Decrease in input price leads to decrease in cost of production. a. The government offers new tax breaks to farmers. Supply curve shifts to right . This tax breaks actually make farming more profitable than before. Thus, can supply more corn. a. A tornado sweeps through Iowa. Supply curve shifts to left. Tornadoes destroy the corns, so less supply of corns.
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1. An Arizona student claims to have spotted a UFO over the desert outside of Tucson. How will his claim affect the supply (not the quantity supplied) of binoculars in Tucson stores? The demand of binoculars might increase. Since people would like to buy one and hoping for the chances to see UFO, and leads to an increase in quantity supplied . However,
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sol_even_3.ppt - Chapter 3 1. How would each of the...

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