Autoworkers negotiate a wage increase.How does this change affect the supply curve of cars?
A) It shifts the supply curve leftward.
B) It shifts the supply curve rightward.
C) It does not shift the supply curve or create a movement along it.
D) The supply curve will shift but there is not enough information to tell if the change shifts the supply curve rightward, leftward, or not at all.
E) It creates a movement downward along the supply curve.

Question

Quizplus · Accepted Answer

An increase in wages for autoworkers raises the cost of production for cars. Higher production costs make it more expensive to produce cars, which typically reduces the quantity supplied at any given price, shifting the supply curve leftward.

Autoworkers Negotiate a Wage Increase