Question

d. government policies

1. if the cost of resources rises, supply will:

a. increase
b. decrease
c. stay the same

1. which determinant of supply explains why a farmer might switch from growing wheat to corn if corn becomes more profitable?
2. if new technology makes toy production cheaper and faster, the supply curve will shift:

a. right
b. left

1. give one example of a government policy (tax or subsidy) that could shift supply. (sentence frame: a tax on ____ would cause supply to __ because ____.)

part c: elasticity of supply

1. elastic supply means producers can respond ____________ (quickly / slowly) to price changes.
2. if production requires a lot of time and resources (like nuclear power), supply is likely to be:

Explanation:

1. When resource - cost rises, production cost increases, reducing producers' willingness to supply, so supply decreases.
2. Producers will switch to more profitable goods due to profit incentives, which is related to the price of other goods as a determinant of supply.
3. New technology reducing production cost and increasing efficiency leads to more supply at each price level, shifting the supply curve right.
4. A tax on cigarettes would cause supply to decrease because it increases producers' costs.
5. Elastic supply implies that producers can quickly adjust production in response to price changes.
6. If production is time - consuming and resource - intensive like nuclear power, supply is inelastic as it's hard to quickly change production levels.

Answer:

1. B. Decrease
2. Price of other goods
3. A. Right
4. A tax on cigarettes would cause supply to decrease because it increases producers' costs.
5. quickly
6. inelastic