Table of contents

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1. Introduction to Macroeconomics1h 57m
2. Introductory Economic Models59m
3. Supply and Demand3h 43m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Price Floors3h 40m
6. Introduction to Taxes1h 25m
7. Externalities1h 3m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. Introducing Economic Concepts49m
11. Gross Domestic Product (GDP) and Consumer Price Index (CPI)1h 37m
12. Unemployment and Inflation1h 15m
13. Productivity and Economic Growth1h 17m
14. The Financial System1h 37m
15. Income and Consumption52m
16. Deriving the Aggregate Expenditures Model1h 22m
17. Aggregate Demand and Aggregate Supply Analysis1h 18m
18. The Monetary System1h 1m
19. Monetary Policy1h 32m
20. Fiscal Policy1h 0m
21. Revisiting Inflation, Unemployment, and Policy46m
22. Balance of Payments30m
23. Exchange Rates1h 16m
24. Macroeconomic Schools of Thought40m
25. Dynamic AD/AS Model35m
26. Special Topics11m

3. Supply and Demand

Big Daddy Shift Summary

Macroeconomics

3. Supply and Demand

Big Daddy Shift Summary

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Multiple Choice

What happens in the market for corn if the price of wheat, a substitute in production, decreases?

Demand shifts to the left

Demand shifts to the right

Supply shifts to the left

Supply shifts to the right

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Verified step by step guidance

Identify the relationship between corn and wheat. They are substitutes in production, meaning that producers can switch between producing corn and wheat based on profitability.

Understand the effect of a decrease in the price of wheat. When the price of wheat decreases, it becomes less profitable for producers to grow wheat compared to corn.

Analyze the impact on the supply of corn. As wheat becomes less profitable, producers are likely to allocate more resources to growing corn instead.

Determine the shift in the supply curve. With more resources allocated to corn production, the supply of corn increases, causing the supply curve to shift to the right.

Conclude that the correct answer is that the supply of corn shifts to the right, as producers respond to the decreased profitability of wheat by producing more corn.