Question

If the supply of corn in the U.S shifts down, which of the following are true?

a. an increase in the price of corn

b. an increase in the number of farm animals in the U.S. that have a diet of corn.

c. a decrease in the number of corn farmers

d. a decrease in the cost of fertilizer, an input into the production of corn

e. all of the above

Answer 1

By downward shift in the supply curve we mean increase in supply. When the supply curve shifts to its right the supply shifts downwards.

Option a. is incorrect because an increase in supply would reduce the price of the output.

b. This option is related to demand curve. As the farm animal will increase the quantity demanded will increase not the supply.

c. When number of corn farmers decrease then the supply curve shifts upward.

d. When input cost will decrease then the supply curve will shift downwards. That is the supply will increase.

Option d. a decrease in the cost of fertilizer, an input into the production of corn.

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