Recall the Application about the decrease in the price of wool in the 1990s to answer the following question(s). In the 1990s, the world price of wool decreased by about 30 percent and prices have remained relatively low since then. In 2012, an organization in New Zealand proposed that sheep shearing be added to the Commonwealth Games and the Olympics as a spectator sport in an effort to increase the awareness and the demand for wool.
-Recall the Application. If the organization in New Zealand was successful in getting the Olympics to include sheep shearing as a spectator sport, and this helped to raise the world price of wool, the quantity of wool supplied would ________ because the market supply curve for wool is ________ sloped.

Question

Quizplus · Accepted Answer

If the demand for wool increases due to the increased awareness created by sheep shearing as a spectator sport, the price of wool will increase. This will incentivize producers to increase the quantity of wool supplied, leading to an increase in quantity supplied. The market supply curve for wool is positively sloped, meaning that as price increases, quantity supplied also increases. Therefore, if the price of wool increases due to increased demand, the quantity of wool supplied will also increase.

Recall the Application About the Decrease in the Price of Wool