Question

For each of the scenarios, please indicate whether there will be an increase or decrease in short-run aggregate supply or if there will be no change. a. The production of a new type of blade for combine harvesters, a tractor used to harvest crops, has allowed wheat farmers to increase productivity by 40%. b. The price of lumber, a commodity, rises drastically due to the effect of heavy winter weather in the American Northwest, where much of the world's lumber is grown. c. A major hurricane in the Gulf of Mexico destroys several oil rigs.

Answer 1

Answer:

Scenario A:

An increase in productivity suggests a fall in the expense of creation, which prompts increment in short run total supply.

Scenario B:

An increase in the cost of timber prompts an increment in cost of production. An ascent in cost of creation prompts a"1 in short run total stockpile.  

Scenario C:

Decrease in the production of oil. As, the typhoons Katrina and Rita devastated 109 oil stages and five boring apparatuses in the Gulf of Mexico, yet just a little bit of production will be lost for good.