Question

determinants of supply - resources and technology exercise 2
which of the following scenarios would likely shift the supply of cars to the left (decrease in supply)?
automobile workers become more productive.
the price of automotive paint decreases.
the price of cars decreases.
the price of steel and aluminum increase.

Explanation:

1. Analyze each option:

• "Automobile workers become more productive": Increased productivity would increase supply (shift right), not decrease.
• "The price of automotive paint decreases": Lower input cost (paint) would increase supply (shift right) as production is cheaper.
• "The price of cars decreases": A price change affects quantity supplied (movement along curve), not supply (shift of curve).
• "The price of steel and aluminum increase": Steel and aluminum are key inputs for cars. Higher input costs increase production costs, leading firms to supply less at each price level, shifting supply left.

Answer:

D. The price of steel and aluminum increase.