Exhibit 3-9
Refer to Exhibit 3-9. X is produced using input Z. If the price of Z rises, an economist would expect a movement in the market for X from
A)E to F.
B)A to B.
C)F to E.
D)B to A.

Question

Exhibit 3-9 
Refer to Exhibit 3-9. X is produced using input Z. If the price of Z rises, an economist would expect a movement in the market for X from
A)E to F. 
B)A to B. 
C)F to E. 
D)B to A.

Quizplus · Accepted Answer

If the price of input Z rises, it would decrease the supply of input Z in the market, causing a shift of the supply curve to the left from S1 to S2. As a result, the equilibrium price of X would increase from P1 to P2 and the equilibrium quantity of X would decrease from Q1 to Q2. This movement would occur from point F to point E along the demand curve for X. Therefore, the correct choice is C.

Exhibit 3-9 Refer to Exhibit 3-9. X Is Produced Using Input Z