Figure 1A.1 :
-Refer to Figure 1A.1. Assume that the graph in this figure represents the demand and supply curves for women's clothing. An increase in the wage rate for seamstresses would be represented by a shift from
A) Demand 1 to Demand 2.
B) Demand 2 to Demand 1.
C) Supply 1 to Supply 2.
D) Supply 2 to Supply 1.

Question

Figure 1A.1 : 
-Refer to Figure 1A.1. Assume that the graph in this figure represents the demand and supply curves for women's clothing. An increase in the wage rate for seamstresses would be represented by a shift from
A) Demand 1 to Demand 2. 
B) Demand 2 to Demand 1. 
C) Supply 1 to Supply 2. 
D) Supply 2 to Supply 1.

Quizplus · Accepted Answer

An increase in the wage rate for seamstresses would increase the cost of producing women's clothing, leading to a decrease in supply. This is represented by a shift from Supply 2 (a higher supply) to Supply 1 (a lower supply), as producers are willing to supply less at each price level.