From November 2007 to March 2008, the price of gold increased from $865 an ounce to over $1,000 per ounce. The increase in price had little to do with the increase in demand from the jewelry industry but significant increase from investors who looked at gold as safe heaven to invest in.

1. The increase in the price of gold was due to

A. an increase in the supply of gold.

B. an increase in the demand for gold.

C. a decrease in the demand for gold.

D. a decrease in the supply of gold.

E. none of the above.

2. Did the increase in the price of gold affect the supply curve for gold jewelry? If so, how?

A. No effect on the supply of gold jewelry.

B. An increase in the supply of gold jewelry.

C. A decrease in the supply of gold jewelry.

D. None of the above.