Table of contents

1. Introduction to Macroeconomics2h 3m
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 14m
17. Aggregate Demand and Aggregate Supply Analysis1h 18m
18. The Monetary System1h 1m
19. Monetary Policy1h 32m
20. Fiscal Policy52m
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

Overview of Supply and Demand Shifts

Macroeconomics

3. Supply and Demand

Big Daddy Shift Summary

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Multiple Choice

What happens in the market for corn if the government decides to subsidize farmers?

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

Understand the concept of a subsidy: A subsidy is a financial assistance provided by the government to producers, which lowers their production costs and encourages them to produce more.

Identify the effect of a subsidy on supply: When the government subsidizes farmers, it effectively reduces their cost of production, making it cheaper to produce corn.

Analyze the supply curve: With lower production costs, farmers are willing to supply more corn at each price level, leading to an increase in supply.

Determine the direction of the supply shift: An increase in supply is represented by a rightward shift of the supply curve in the market for corn.

Conclude the market impact: As the supply curve shifts to the right, the market will experience an increase in the quantity of corn supplied, potentially leading to a decrease in the market price of corn, assuming demand remains constant.