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Glossary
Knowledge Check - Scenario 1

For the following scenario in the milk market, identify the type and cause of change. Note that these scenarios are asking about producer behavior—supply and quantity supplied.


Scenario 1: The price of milk increases from $3.50 to $4.50 per gallon.

1. Based on Scenario 1, the supply curve for milk

shifts to the right.

shifts to the left.

does not shift.

 
Scenario 1: The price of milk increases from $3.50 to $4.50 per gallon.
 
2. Based on Scenario 1, movement occurs

up the supply curve for milk.

down the supply curve for milk.

nowhere on the supply curve.

 
Scenario 1: The price of milk increases from $3.50 to $4.50 per gallon.
 
3. Based on Scenario 1, there is

a change in supply.

a change in quantity supplied.

 
Scenario 1: The price of milk increases from $3.50 to $4.50 per gallon.
 
4. Based on Scenario 1, which factor caused the change in the quantity supplied of milk?

A change in the costs of inputs to the production process

A change in technology

A change in the number of producers in the market

Government policies

Expectations of future prices

A change in the price of other goods produced by a firm

A change in the price of milk.