Explain how the following factors will shift the supply curve for sparkling wine:
a. New irrigation technology improves the average yield of a vineyard.
b. Following an increase in the immigration of unskilled labor, the wages of wine-grape pickers fall.
c. The government sets a minimum wage for seasonal employment.
a. With an increase in yield, the supply curve of grapes used to make sparkling wine will shift to the right. The price of grapes will fall. Since the price of an input falls, the supply curve for sparkling wine will shift to the right.
b. A fall in the wages of wine-grape pickers implies that the cost of producing sparkling wine has decreased. The supply curve for sparkling wine will shift to the right.
c. A minimum wage is likely to be higher than the equilibrium wage. Since wine-grape picking is a seasonal occupation, the wage paid to a wine-grape picker is likely to increase. This will shift the supply curve to the left.
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