GLS_2_8

Question 1 of 3

Question 1.

The graph presents the changes in quantity demanded resulting from the outbreak of salmonella. Why doesn't the episode of salmonella poisoning change the supply curve?

Salmonella poisoning does not change the producers' costs of production or outside options.

Since salmonella poisoning changes consumers' tastes and preferences this effect overwhelms the supply side effect of reducing producers' crop size.

It does change the supply curve and producers bring less to market.

While salmonella changes the cost of production, the effect is so small no change is noticed in the supply curve.

100

Correct! The salmonella poisoning changes consumers’ tastes and preferences, resulting in a shift of the demand curve. The outbreak does not alter the cost of producing tomatoes, the technology used, the market structure, or any of the other factors that impact the supply curve. Accordingly, the only shift that occurs is on the demand side.

Incorrect. The salmonella poisoning changes consumers’ tastes and preferences, resulting in a shift of the demand curve. The outbreak does not alter the cost of producing tomatoes, the technology used, the market structure, or any of the other factors that impact the supply curve. Accordingly, the only shift that occurs is on the demand side.

Chapter 1. eFigure 2.8

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Question 2.

Question 3.