Now lets move over to exhibit 5 4 on page 117 take a

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Unformatted text preview: he world. Now let’s move over to Exhibit 5-4 on page 117. Take a look at S1. Ask yourself what has to happen before S1 shifts to its right and becomes S2. Does price (on the vertical axis) have to change? No, as you can see in the exhibit, we never change price from $1,000. So, then, you know that a change in a good’s actual price isn’t what will shift a supply curve. What then does shift a THINK ABOUT IT Some people believe that the world has only a finite number of jobs, and so with more people—and the same number of jobs—many more people will be unemployed in the future if people live to be 100. The problem with this way of thinking, though, is that in 2005, the population of the United States was greater than it was in 1982, but the unemployment rate in 1982 was higher than the unemployment rate in 2005. Do you think these numbers are evidence that there “are not a finite number of jobs in the world”? supply curve? The answer is a change in resource prices, technology, taxes, and so on. Elasticity of Supply Chapter 4 discussed elasticity of demand, which deals with the relationship between pri...
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This document was uploaded on 01/16/2014.

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