Figure 9-3

-Suppose that U.S.tastes for British goods increase.Then,in Figure 9-3
A)the supply curve shifts from S₁ to S₂
B)the supply curve shifts from S₂ to S₁
C)the demand curve shifts from D₂ to D₁
D)the demand curve shifts from D₁ to D₂
E)both demand and supply shift to the right

Question

Figure 9-3
 
-Suppose that U.S.tastes for British goods increase.Then,in Figure 9-3
A)the supply curve shifts from S₁ to S₂ 
B)the supply curve shifts from S₂ to S₁ 
C)the demand curve shifts from D₂ to D₁ 
D)the demand curve shifts from D₁ to D₂ 
E)both demand and supply shift to the right

Quizplus · Accepted Answer

If U.S. tastes for British goods increase, it means that U.S. consumers demand more British goods. This will shift the demand curve to the right from D₁ to D₂, resulting in a new equilibrium point at E₂. As a result, the quantity of British goods supplied will also increase, causing a movement along the supply curve from S₁ to S₂. Therefore, the correct choice is D.

Figure 9-3 -Suppose That U.S.tastes for British Goods Increase.Then,in Figure 9-3