[amp_mcq option1=”A situation in which the quantity demanded exceeds the quantity supplied” option2=”An increase in the cost of the machinery to produce X” option3=”A decrease in the wages of workers employed to produce X” option4=”A technology improvement in the production of X” correct=”option1″]<\/p>\n
The correct answer is: A situation in which the quantity demanded exceeds the quantity supplied.<\/p>\n
A decrease in the cost of the machinery to produce X, an increase in the wages of workers employed to produce X, and a technology improvement in the production of X will all shift the supply curve for good X rightward.<\/p>\n
A situation in which the quantity demanded exceeds the quantity supplied is a disequilibrium situation. In this situation, there is a shortage of the good, and the price of the good will rise. This rise in price will encourage producers to produce more of the good, which will shift the supply curve rightward.<\/p>\n
Here is a diagram that illustrates the effect of a decrease in the cost of the machinery to produce X on the supply curve:<\/p>\n
[Diagram of a supply curve shifting rightward]<\/p>\n
The original supply curve is S1. The decrease in the cost of machinery shifts the supply curve to S2. The equilibrium price falls from P1 to P2, and the equilibrium quantity rises from Q1 to Q2.<\/p>\n
Here is a diagram that illustrates the effect of an increase in the wages of workers employed to produce X on the supply curve:<\/p>\n
[Diagram of a supply curve shifting leftward]<\/p>\n
The original supply curve is S1. The increase in wages shifts the supply curve to S2. The equilibrium price rises from P1 to P2, and the equilibrium quantity falls from Q1 to Q2.<\/p>\n
Here is a diagram that illustrates the effect of a technology improvement in the production of X on the supply curve:<\/p>\n
[Diagram of a supply curve shifting rightward]<\/p>\n
The original supply curve is S1. The technology improvement shifts the supply curve to S2. The equilibrium price falls from P1 to P2, and the equilibrium quantity rises from Q1 to Q2.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”A situation in which the quantity demanded exceeds the quantity supplied” option2=”An increase in the cost of the machinery to produce X” option3=”A decrease in the wages of workers employed to produce X” option4=”A technology improvement in the production of X” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-43755","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n