Explain how the following factors will shift the supply curve for sparkling wine:

a. New irrigation technology improves the average yield of a vineyard.
b. Following an increase in the immigration of unskilled labor, the wages of wine-grape pickers fall.
c. The government sets a minimum wage for seasonal employment.


a. With an increase in yield, the supply curve of grapes used to make sparkling wine will shift to the right. The price of grapes will fall. Since the price of an input falls, the supply curve for sparkling wine will shift to the right.
b. A fall in the wages of wine-grape pickers implies that the cost of producing sparkling wine has decreased. The supply curve for sparkling wine will shift to the right.
c. A minimum wage is likely to be higher than the equilibrium wage. Since wine-grape picking is a seasonal occupation, the wage paid to a wine-grape picker is likely to increase. This will shift the supply curve to the left.

Economics

You might also like to view...

Suppose that a price-discriminating producer divides its market into two segments

If the firm sells its product at a price of $34 in the market segment with relatively less-elastic customer demand, the price in the market segment with more-elastic customer demand will be A) less than marginal revenue in that market segment. B) less than $34. C) equal to marginal revenue in that market segment. D) greater than $34.

Economics

The general form of the production function used in Chapter 10 is

A) Y = A + F(K, N). B) Y = A - F(K, N). C) Y = AF(K, N). D) Y = A/F(K, N).

Economics

A rightward shift of the Mexican demand curve for foreign exchange will

a. decrease the price of foreign exchange in Mexico b. increase the value of the peso c. make foreign goods less expensive in terms of pesos d. make foreign goods more expensive in terms of pesos e. make Mexican goods more expensive in terms of foreign exchange

Economics

A comprehensive income tax with few loopholes is efficient because labor

a. supply is very little affected by taxation. b. demand is very little affected by taxation. c. supply is highly responsive to taxation. d. demand is highly responsive to taxation.

Economics