ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -If the price of steel increases, the supply of cars will decrease. This will cause the equilibrium price to increase and the equilibrium quantity to decrease.

Detailed explanation-2: -Answer and Explanation: False. Since steel is used in the production of automobiles, an increase in the price of steel means that producing automobiles will be expensive. Thus, less automobiles will be produced and the supply curve for automobiles will shift to the left.

Detailed explanation-3: -If the price of a resource used to produce the product increases, this will increase the costs of production and the producer will no longer be willing to offer the same quantity at the same price. They will want a higher price to cover the higher costs. This shifts the supply curve to the left ( S).

Detailed explanation-4: -An increase in demand and a decrease in supply will cause an increase in equilibrium price, but the effect on equilibrium quantity cannot be detennined. 1. For any quantity, consumers now place a higher value on the good, and producers must have a higher price in order to supply the good; therefore, price will increase.