Question 42

Supply shifts to the left

The destruction of a large portion of the wheat crop due to storms will lead to a decrease in the available supply of wheat. As wheat is a primary ingredient in wheat bagels, this reduction in supply will cause a leftward shift in the supply curve for wheat bagels.

A) Demand shifts to the left

This option is incorrect because a decrease in supply due to crop destruction does not directly affect consumer demand for wheat bagels. In fact, if the bagels are still desired, demand may remain stable or even increase, making this option not applicable in this scenario.

B) Supply shifts to the right

This option is incorrect as it suggests an increase in supply, which is contrary to the effects of the storms that damaged the wheat crop. The availability of wheat will decrease, leading to a leftward shift in the supply curve, not a rightward one.

C) Supply shifts to the left

This option is correct because the storms have destroyed a significant portion of the wheat crop, reducing the overall supply of wheat available for producing wheat bagels. As a result, the supply curve for wheat bagels shifts to the left, indicating a decrease in supply.

D) Demand shifts to the right

This option is incorrect because the destruction of the wheat crop is not a factor that would typically increase demand for wheat bagels. While consumer preferences may remain unchanged, the supply constraint would likely lead to higher prices rather than an increase in demand.

Conclusion

The correct answer is that the supply shifts to the left due to the destruction of the wheat crop, which directly impacts the availability of wheat for bagel production. All other options fail to accurately describe the market dynamics at play, as they do not reflect the consequences of reduced supply caused by the storms. Therefore, understanding supply shifts is crucial in predicting market responses to agricultural disruptions.