shift from the original demand curve, D0 to D1 on the diagram (labeled Shift 3), and the equilibrium moves from E2 to
E3.”

FIGURE 3.20 Shifts of Demand or Supply versus Movements along a Demand or Supply Curve A shift in one curve

never causes a shift in the other curve. Rather, a shift in one curve causes a movement along the second curve.

At about this point, Lee suspects that this answer is headed down the wrong path. Think about what might be wrong

with Lee’s logic, and then read the answer that follows.

Answer:Lee’s first step is correct: that is, a drought shifts back the supply curve of wheat and leads to a prediction
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