Paper 1 · November 2010 · Demand and Supply
The diagram shows supply curves for commodity X. The shift of the supply curve from to could be caused by
Aa government subsidy to producers of X.
Bimproved techniques of production of X.
Ca fall in the prices of raw materials used in manufacturing X.
Dan increase in the wage rates paid to workers in the industry for X.
Explanation
The shift from S1 to S2 shows a decrease in supply (leftward shift). An increase in wage rates increases costs of production, thereby reducing supply. Options A, B and C would all increase supply.
ZIMSEC Economics Paper 1, November 2010, Q4