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Economics Changes in Market Equilibrium E. Napp 1) Several factors can create disequilibrium in a market. Define disequilibrium: _________________________________________________ How can price push a market into disequilibrium? _______________________________________________________________ _______________________________________________________________ Why does a shift in the demand or supply curve push a market into disequilibrium? _______________________________________________________________ _______________________________________________________________ Can new technology push a market into disequilibrium? ______________ Provide an example of new technology pushing a market into disequilibrium: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ 2) What is another word for excess supply? ____________________ What occurs when this happens? _______________________________________________________________ _______________________________________________________________ What course of action do producers take to remedy this problem? _____________________________ Why does this course of action work? _________________________________________________ 3) What is another word for excess demand? ____________________ What occurs when this happens? _______________________________________________________________ _______________________________________________________________ What course of action do producers take to remedy this problem? ________________________ Why does this course of action work? _____________________________________________ 4) Explain how the equilibrium price and quantity sold of eggs will change in the following cases: A- An outbreak of food poisoning is traced to eggs: Quantity of eggs sold: ___________________________________ Equilibrium price: ______________________________________ Producers’ remedy: _____________________________________ B- Scientists breed a new chicken that lays twice as many eggs each week: Quantity of eggs sold: ____________________________________ Equilibrium price: _______________________________________ Producers’ remedy: ______________________________________ C- A popular talk show host convinces her viewers to eat an egg a day: Quantity of eggs sold: ___________________________________ Equilibrium price: ______________________________________ Producers’ remedy: _____________________________________ 5) Search costs are the financial and opportunity costs consumers pay when searching for a good or service. An example of a search cost might be driving to different stores and calling different towns to find an available doll. How do search costs affect consumers’ decisions to buy? _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ 6) So, is price the only factor in a consumer’s decision to buy? Explain your answer. _______________________________________________________________ _______________________________________________________________
