Practicing Supply and Demand

Draw the curves, shift the one that is appropriate and determine the effect

on price and quantity

G: heating oilS: coldest winter in 20 yearsR:

G: heating oilS: coldest winter in 20 yearsR: preferences

S

D

Price

Quantity

D1

P1

P2

Q1 Q2

G: Domestic oilS: Hurricane devastates U.S. Gulf Coast

G: Domestic oilS: Hurricane devastates U.S. Gulf CoastR: Number of Sellers

S1

D

Price

Quantity

P1

P2

Q1Q2

S2

G: Nintendo WiiS: Becomes the Must-Have-Game System during DecemberR:

G: Nintendo WiiS: Becomes the Must-Have-Game System during DecemberR: preferences

S

D

Price

Quantity

D1

P1

P2

Q1 Q2

G: Sony PS3S: Manufacturing Plants suffer breakdownsR:

G: Sony PS3S: Manufacturing plants suffer breakdownsR: technology

S1

D

Price

Quantity

P1

P2

Q1Q2

S2

G: Housing in Southern CaliforniaS: 1 million new people immigrate to CaliforniaR:

G: Housing in Southern CaliforniaS: 1 million new people immigrate to CaliforniaR: number of buyers

S

D

Price

Quantity

D1

P1

P2

Q1 Q2

G: Indianapolis Colts TicketsS: Colts go to the ChampionshipsR:Note: a Fixed Supply curve

G: Indianapolis Colts TicketsS: Colts go to the ChampionshipsR: preferencesNote: a Fixed Supply curve

S

D

Price

Quantity

D1

P1

P2

Q1

G: Chicago Bears JerseysS: Bears win the Super BowlR:

G: Chicago Bears JerseysS: Bears win the Super BowlR: preferences

S

D

Price

Quantity

D1

P1

P2

Q1 Q2

G: Hotel Rooms in CancunS: Spring BreakR:Note: fixed Supply curve

G: Hotel Rooms in CancunS: Spring BreakR: preferences/ number of buyersNote: fixed Supply curve

S

D

Price

Quantity

D1

P1

P2

Q1

G: Baseball MittsS: Trade agreement with Vietnam removes import quotas on goods made in VietnamR:

G: Baseball MittsS: Trade agreement with Vietnam removes import quotas on goods made in VietnamR: govt restrictions

S1

D

Price

Quantity

P1

P2

Q1 Q2

S2

G: CD PlayersS: iPodR

G: CD PlayersS: iPodR: substitutes

S

DPrice

Quantity

D1

P1

P2

Q1Q2

G: SUVsS: Gas hits $5.00 a gallonR:

G: SUVsS: Gas hits $5.00 a gallonR: complements

S

DPrice

Quantity

D1

P1

P2

Q1Q2

G: Britney Spears cdS: Britney gains 100 pounds

G: Britney Spears cdS: Britney gains 100 poundsR: preferences

S

DPrice

Quantity

D1

P1

P2

Q1Q2

G: DiapersS: Baby BoomR:

G: DiapersS: Baby BoomR: number of buyers

S

D

Price

Quantity

D1

P1

P2

Q1 Q2

G: BeefS: Mad Cow DiseaseR:

G: BeefS: Mad Cow DiseaseR: preferences

S

DPrice

Quantity

D1

P1

P2

Q1Q2

G: ChickenS: Mad Cow DiseaseR: 

G: ChickenS: Mad Cow DiseaseR: substitutes 

S

D

Price

Quantity

D1

P1

P2

Q1 Q2

G: Krispy Kreme DonutsS: Low Carb Craze sweeps nationR:

G: Krispy Kreme DonutsS: Low Carb Craze sweeps nationR: preferences

S

DPrice

Quantity

D1

P1

P2

Q1Q2

G: AutomobilesS: Government requires seat belts, air bagsR:

G: AutomobilesS: Government requires seat belts, air bagsR: govt. restrictions

S1

D

Price

Quantity

P1

P2

Q1Q2

S2

G: Flu VaccinesS: Government provides vaccine makers tax breaksR:

G: Flu VaccinesS: Government provides vaccine makers tax breaksR: subsidies

S1

D

Price

Quantity

P1

P2

Q1 Q2

S2

G: Agricultural Crops (i.e. lettuce, grapes, etc.)S: Agricultural workers strike and receive a raiseR:

G: Agricultural Crops (i.e. lettuce, grapes, etc.)S: Agricultural workers strike and receive a raiseR: inputs

S1

D

Price

Quantity

P1

P2

Q1Q2

S2

G: Dairy ProductsS: Hormones that increase dairy milk production developed R: 

G: Dairy ProductsS: Hormones that increase dairy milk production developed R: technology 

S1

D

Price

Quantity

P1

P2

Q1 Q2

S2

G: California WineS: 50 new vineyards open in the Napa ValleyR:

G: California WineS: 50 new vineyards open in the Napa ValleyR: number of sellers

S1

D

Price

Quantity

P1

P2

Q1 Q2

S2

G: French CheesesS: Tariff imposed in French agricultural productsR:

G: French CheesesS: Tariff imposed in French agricultural productsR: govt. restrictions

S1

D

Price

Quantity

P1

P2

Q1Q2

S2