Which of the following is a FALSE statement?
A. Changes in the price of inputs can cause a shift in supply.
B. If the price of other goods change, it can cause a shift in supply.
C. Government involvement in the economy will not cause a shift in supply.
D. Certain advancements in technology can cause a shift in supply.
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C. Government involvement in the economy will not cause a shift in supply.
To determine which statement is FALSE, let's examine each statement one by one:
A. Changes in the price of inputs can cause a shift in supply.
This statement is true. When the price of inputs, such as raw materials or labor, changes, it can affect the cost of production for producers. If input prices increase, producers may be less willing or able to supply goods at the same quantity as before, leading to a decrease in supply, and vice versa.
B. If the price of other goods changes, it can cause a shift in supply.
This statement is true. Changes in the price of related goods can impact supply. For example, if the price of a substitute good increases, producers may be more incentivized to supply that substitute rather than the original good, causing a decrease in supply. Similarly, if the price of a complementary good decreases, producers may increase the supply of the related good.
C. Government involvement in the economy will not cause a shift in supply.
This statement is FALSE. Government involvement in the economy can indeed cause a shift in supply. Government policies such as taxes, regulations, subsidies, or trade restrictions can directly impact the cost of production or alter market conditions, ultimately affecting the supply of goods and services.
D. Certain advancements in technology can cause a shift in supply.
This statement is true. Technological advancements can significantly impact supply. New technologies can lead to increased productivity and efficiency, allowing producers to supply more goods at a lower cost. As a result, supply can shift outward, leading to an increase in the quantity supplied at every price level.
Therefore, the FALSE statement is C. Government involvement in the economy will not cause a shift in supply.