QUESTION IMAGE
Question
- analyze the hamburger market given each scenario to identify the shifter and graphically how to change supply.
| shifter | increase or decrease | shift to the right or left? | |
|---|---|---|---|
| 2 | price of hamburgers increase by 30% | ||
| 3 | government increases taxes on hamburger producers | ||
| 4 | new oven cuts bread baking time in half | i | |
| 5 | the government increases subsidies on cattle ranchers | ||
| 6 | labor costs increase | ||
| 7 | chicken sandwiches become a more profitable industry |
Step1: Analyze scenario 1
A virus killing cows reduces input availability. Supply shifter is input prices (less cows mean higher - priced beef for hamburgers). Supply decreases and shifts left.
Step2: Analyze scenario 2
Change in price of hamburgers is a movement along the supply curve, not a shift. No shifter for supply - curve shift.
Step3: Analyze scenario 3
Higher taxes on producers increase production cost. Supply shifter is government policies. Supply decreases and shifts left.
Step4: Analyze scenario 4
New oven improves technology in bread - making (a part of hamburger production). Supply shifter is technology. Supply increases and shifts right.
Step5: Analyze scenario 5
Subsidies on cattle ranchers lower production cost. Supply shifter is government policies. Supply increases and shifts right.
Step6: Analyze scenario 6
Higher labor costs increase production cost. Supply shifter is input prices. Supply decreases and shifts left.
Step7: Analyze scenario 7
Chicken sandwiches being more profitable means resources may shift away from hamburger production. Supply shifter is prices of related goods. Supply decreases and shifts left.
| Scenario | Shifter | Increase or Decrease | Shift to the right or left? |
|---|---|---|---|
| 2 | None (movement along curve) | None (movement along curve) | None (movement along curve) |
| 3 | Government policies | Decrease | Left |
| 4 | Technology | Increase | Right |
| 5 | Government policies | Increase | Right |
| 6 | Input prices | Decrease | Left |
| 7 | Prices of related goods | Decrease | Left |
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Step1: Analyze scenario 1
A virus killing cows reduces input availability. Supply shifter is input prices (less cows mean higher - priced beef for hamburgers). Supply decreases and shifts left.
Step2: Analyze scenario 2
Change in price of hamburgers is a movement along the supply curve, not a shift. No shifter for supply - curve shift.
Step3: Analyze scenario 3
Higher taxes on producers increase production cost. Supply shifter is government policies. Supply decreases and shifts left.
Step4: Analyze scenario 4
New oven improves technology in bread - making (a part of hamburger production). Supply shifter is technology. Supply increases and shifts right.
Step5: Analyze scenario 5
Subsidies on cattle ranchers lower production cost. Supply shifter is government policies. Supply increases and shifts right.
Step6: Analyze scenario 6
Higher labor costs increase production cost. Supply shifter is input prices. Supply decreases and shifts left.
Step7: Analyze scenario 7
Chicken sandwiches being more profitable means resources may shift away from hamburger production. Supply shifter is prices of related goods. Supply decreases and shifts left.
| Scenario | Shifter | Increase or Decrease | Shift to the right or left? |
|---|---|---|---|
| 2 | None (movement along curve) | None (movement along curve) | None (movement along curve) |
| 3 | Government policies | Decrease | Left |
| 4 | Technology | Increase | Right |
| 5 | Government policies | Increase | Right |
| 6 | Input prices | Decrease | Left |
| 7 | Prices of related goods | Decrease | Left |