Figure 7C

-Refer to Figure 7C. Assume that the farm product is grapes for wine-making. Which of the following reason(s) can result in a shift of the supply curve as illustrated in the figure?
A) Grape farms have improved access to water.
B) New, stricter environmental regulations improve air quality.
C) New, lax environmental regulations reduce air quality.
D) Both a and b
E) Both a and c

Question

Figure 7C
 
-Refer to Figure 7C. Assume that the farm product is grapes for wine-making. Which of the following reason(s) can result in a shift of the supply curve as illustrated in the figure?
A) Grape farms have improved access to water. 
B) New, stricter environmental regulations improve air quality. 
C) New, lax environmental regulations reduce air quality. 
D) Both a and b 
E) Both a and c

Quizplus · Accepted Answer

Improving access to water for grape farms will increase their productivity, leading to an increase in supply and a shift in the supply curve to the right. Similarly, stricter environmental regulations that improve air quality can lead to improved growing conditions and increased productivity, also resulting in a rightward shift of the supply curve. In contrast, lax environmental regulations that reduce air quality can lead to decreased productivity and a leftward shift of the supply curve. Therefore, choices A and B can result in a shift of the supply curve, while choice C will not. Both A and B are correct, so the answer is D.

Figure 7C -Refer to Figure 7C. Assume That the Farm Product Is