In which direction would the price of gasoline increases

Question

In which direction would each of the following changes in conditions cause the aggregate supply curve to shift?

1. The price of gasoline increases because of a catastrophic oil spill.

2. Labor unions and all other workers agree to a cut in wages to stimulate the economy.

3. Power companies switch to solar power, and the price of electricity falls.

4. The federal government increases the excise tax on gasoline in order to finance a deficit.

Answer 1

Consider the situation provided and perform as per guidelines. Task: In which direction would each of the given changes in conditions causes the aggregate supply curve to shift? 1) The price of gasoline rises as a catastrophic oil spill. 2) Labor unions and all other workers concur to a cut in salaries to stimulate the economy. 3) Power companies switch to the solar power and the price of electricity drops. 4) The federal government raises the excise tax on gasoline in order to finance the deficit.