Suppose you are a producer of friendship bracelets. How would the following events affect your/the market's willingness and ability supply friendships bracelets? Match the event on the left to the proper determinant on the right.
____ Many more students decide to sell friendship bracelets
_____ The cost of labor to produce bracelets decreases
_____ The price of friendship bracelets decreases.
______ You improve the education of your workers and they make more bracelets in the same time as before.
______ The school requires you to put a warning label on each bracelet.
A. This is a change in costs due to gov intervention
B. This is a change in cost of input.
C. This does not affect supply.
D. This is a change in the number of suppliers.
E. This is a change in the quality of inputs.
a
c
b
d
e
d
a
b
c
e
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To match the events with the proper determinants that affect the market's willingness and ability to supply friendship bracelets, we need to consider the factors that influence the supply of a product. Here are the events and their corresponding determinants:
1. Increase in the price of cotton:
Determinant: Input prices - The price of cotton is an input cost for producing friendship bracelets. An increase in the price of cotton will increase the production costs, reducing the market's willingness and ability to supply friendship bracelets.
2. Introduction of new technology for making bracelets:
Determinant: Technology - The introduction of new technology can increase the efficiency and productivity of bracelet production. This would likely increase the market's willingness and ability to supply friendship bracelets.
3. Government subsidies for friendship bracelet producers:
Determinant: Subsidies - Government subsidies can reduce production costs and increase profitability for bracelet producers. This would likely increase the market's willingness and ability to supply friendship bracelets.
4. Decrease in the price of alternative materials used for bracelets:
Determinant: Prices of related goods - If the price of alternative materials used for bracelets decreases, it would reduce the production costs for friendship bracelets. This would likely increase the market's willingness and ability to supply friendship bracelets.
5. Increase in demand for friendship bracelets:
Determinant: Market demand - An increase in demand for friendship bracelets would create a greater market opportunity, incentivizing producers to increase their supply to meet the demand.
By considering these determinants, we can analyze how each event affects the market's willingness and ability to supply friendship bracelets.