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  1. Congress passes a law which places a tax specifically on soda and takes effect today. What, if anything, happens to the supply of soda today?



Circle One:

AIncrease in Supply
BDecrease in Supply
CNo Change in Supply



Factor Shifting the Supply Curve: _______


  1. Time machines are invented and selling off the shelves! More and more companies are creating their own version. What, if anything, happens to the supply of time machines today?



Circle One:

AIncrease in Supply
BDecrease in Supply
CNo Change in Supply



Factor Shifting the Supply Curve: _______


  1. The Fourth of July is only two months away! What, if anything, happens to the supply of fireworks today?



Circle One:

AIncrease in Supply
BDecrease in Supply
CNo Change in Supply



Factor Shifting the Supply Curve: _______


  1. Write your own scenario and then fill in the correct answers:



Circle One:

AIncrease in Supply
BDecrease in Supply
CNo Change in Supply



Factor Shifting the Supply Curve: _______

Verified Answer :

Final answer:

Taxation on soda will decrease its supply, while increased demand for time machines and upcoming celebrations raise the supply of those products. Understanding these market factors is essential for analyzing supply changes. Finally, creating relevant examples reinforces these economic principles.


Explanation:

Understanding Supply Response to Taxes and Market Trends

In the scenarios presented, we analyze how specific factors affect the supply of various products.

5. Tax on Soda

When Congress implements a tax on soda, the supply of soda is likely to decrease. This is because the additional cost incurred by producers due to the tax can lead to reduced profitability, prompting them to produce less. Therefore, the answer is:

  1. Decrease in Supply

Factor Shifting the Supply Curve: Increase in production cost due to taxation.

6. Time Machines in Demand

With the rise in popularity and production of time machines, we expect an increase in supply. More companies entering the market means more available products for consumers. Hence, the answer is:

  1. Increase in Supply

Factor Shifting the Supply Curve: New entrants in the market leading to higher production.

7. Fireworks and Seasonal Demand

As the Fourth of July approaches, the supply of fireworks is likely to increase. Producers ramp up production in anticipation of increased consumer demand during this festive period. Therefore, the answer is:

  1. Increase in Supply

Factor Shifting the Supply Curve: Anticipation of higher seasonal demand.

8. Your Own Scenario

Create a scenario, such as a new health trend promoting organic foods. You might conclude:

  1. Increase in Supply

Factor Shifting the Supply Curve: Surge in consumer preferences for organic products.


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