Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman

Exercise 6

When we observe an increase in both price and quantity,we know that the demand curve must have shifted rightward. However,we cannot rule a shift in the supply curve as well. Prove this by drawing a supply-and-demand diagram for each of the following cases:
a. Demand curve shifts rightward,supply curve shifts leftward,equilibrium price and quantity both rise.
b. Demand and supply curves both shift rightward,equilibrium price and quantity both rise.
c. Evaluate the following statement: "During the oil price spike from 2007 to mid-2008,we know the supply curve could not have shifted leftward,because quantity supplied rose." True or False? Explain