Lumber companies make timber beams from logs. In the process of making beams, the mill produces sawdust, which is made into pressed wood. In the market for timber beams, the following events occur one at a time:

• The wage rate of sawmill workers rises.

• The price of sawdust rises.

• The price of a timber beam rises.

• Next year’s expected price of a timber beam rises.

• A new law reduces the amount of forest that can be cut for timber.

• A new technology lowers the cost of producing timber beams.

1. Explain the effect of each event on the supply of timber beams.

2. Use a graph to illustrate the effect of each event.

3. Does any event (or events) illustrate the law of supply?