-The above figure shows the supply and demand curves for rice in the U.S.and Japan.Assume there is no trade between the two countries.If bad weather causes the supply curves in each country to shift leftward by the same amount,then
A) the price will increase in both countries.
B) the price will decrease in both countries.
C) the change in price cannot be determined.
D) None of the above.

Question

-The above figure shows the supply and demand curves for rice in the U.S.and Japan.Assume there is no trade between the two countries.If bad weather causes the supply curves in each country to shift leftward by the same amount,then
A) the price will increase in both countries. 
B) the price will decrease in both countries. 
C) the change in price cannot be determined. 
D) None of the above.

Quizplus · Accepted Answer

A leftward shift in the supply curve indicates a decrease in supply. According to basic economic principles, if demand remains constant and supply decreases, prices will increase. This applies to both the U.S. and Japan, hence the price of rice will increase in both countries.

-The Above Figure Shows the Supply and Demand Curves for Rice