Question

Consider the supply of peanut butter.1) Which of the following would cause a movement along the supply curve (a change in the quantity supplied) for peanut butter?
Check all that apply.a) A change in the price of peanut butterb) A change in the number of producersc) A change in the price of labor (used in the production of peanut butter)2) Which of the following would cause a shift in the supply curve for peanut butter?
Check all that apply.a) A change in the number of producersb) A change in expectations about the future price of peanut butterc) A change in the price of peanut butter

Answer 1

Answer:

1. a) A change in the price of peanut butter

c) A change in the price of labor (used in the production of peanut butter)

2. b) A change in expectations about the future price of peanut butter

c) A change in the price of peanut butter

Explanation:

1. As we know in Economics that increase in demand lead to increase in supply and vice versa. But this increase in demand can arise if the price is low. therefore, a change in quantity supply can be due to a change in price of the peanut.

(increase price will lead to decrease in supply and vice versa)

a) A change in the price of peanut butter

c) A change in the price of labor (used in the production of peanut butter)

A change is price of labor can be one determinant of price of peanut. therefore, a change in price of labor can also be a determinant to the movement of supply curve.

2.Which of the following would cause a shift in the supply curve for peanut butter?

A shift in supply curve can be cause by the following:

b) A change in expectations about the future price of peanut butter: Seller expectation that may be at a particular period, the goods tends to be expensive. this is common in seasonal goods.

c) A change in the price of peanut butter: as explain above