Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 4 - Part II - The Market Forces of Supply and Demand - Problems and Applications - Page 87: 6

Answer

Please see the graphs.

Work Step by Step

a) The supply of cotton decreases, shifting the supply curve to the left. b) Compared to leather jackets, sweatshirts are an inferior good. Since the price of leather jackets decreased, demand for sweatshirts also decreased. The demand curve shifted to the left. c) Demand for sweatshirts increased, shifting the curve to the right. d) Technology decreased the labor needed for each sweatshirt, so supply increased (and shifts the supply curve to the right).
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