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For each of the following scenarios, determine if there is an increase or a decrease in supply for the good in italics.

a. The price of silver increases.
b. Growers of tomatoes experience an unusually good growing season.
c. New medical evidence reports that consumption of organic products reduces the incidence of cancer.
d. The wages of low-skill workers, a resource used to help produce clothing, increase.

User Kenee
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Answer:

a. The price of silver increases. - Supply Increase

As the price of silver increases, it will make silver more profitable therefore producers will increase production to take advantage of the higher prices to make more profit in total.

b. Growers of tomatoes experience an unusually good growing season. - Supply Increase

If growers of tomatoes experience a good season, it means that there will be more tomatoes to harvest. This will increase the supply of tomatoes.

c. New medical evidence reports that consumption of organic products reduces the incidence of cancer. - Supply Increase.

Supply of organic products will increase as a result of an anticipated and an actual increase in the demand for organic products as more people will buy them to avoid getting cancer.

d. The wages of low-skill workers, a resource used to help produce clothing, increase. - Supply Decrease

When inputs into the production process increase, producers will tend to cut down production to enable them save cost and maintain profitability. If the wages of low-skill workers increase, it will mean that an input is now more expensive so production of clothing will reduce thereby reducing its supply.

User Kareemostafa
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