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_ •••••••••••• -.IiIIiIIiiioi -. ••••• - ••••• ·· Date ~_'--~_~ Chapter 3 __ ---'-~_~ ECONoMIC SKILLS'LAS AnafyZihg Changes ill Qe/'nahd . . ; I' t., of . The quantity a product' dernimded'depeQds on its price and on the prices of substituteand complementary .,p~oducts~ SOrnetirties' conditions change, and the demand fora 'productshifts so that different quantities are 'dernandedateach andevery price.. ..' "".. . . . \ ( . Changes ih tile following variables can lead toa shift in demand: . . 'a.;'ID,coine .... . d.theprice of complements b. the price ofsubstitutes: '. e.tastesand preferences .'.c. the number of buyersf. 'expectations \ .' After the "events" described in column 1, what will happen-to the demand for the products listed in column.Z? In the ,space provided iri column 3, show how the demand curve shifts. Write. the letter in column 4 of variable that responsible for thechange. . . th~ is Z. Product 1. Event The price of steak increases.' . . . ." 3. Demand Shift . t~·, - Hamburger . . .Low-fatdiets.grow . . Fresh gra~s 4. Variable b. The price of substitutes in. popularity, Di~~eyWo~ld increases admission.prices. . The price ofeggs falls.' '. lHotd'rooms neai . Disney World (Bacon' ,'I' Ii Ahard freeze destroys . Or~gy juice ~. much of the future. orange crop. . The-price of gasoline. increases.dramatically, '<'. Motorcycles . People's incomes drop. . Chicken. ,',":", ';. '. Class Name . r ; ACTIVITY' 8 Date Free Enterprise , ,~. SUPPLY AND DEMAND \ There qre various nonprice factors that cause shifts in the supply and demand curves, not just movement along the same curves. The chart below indicates several situations that will have an effect on the' supply ~nd demand curves for cable television. Read each situation and answer the following questions for each one in the charlo The first situation has been completed as an . example. .' 1. 2. 3. 4. Which nonprice factor causes the shift in the curve? Would the ~hift be in the supply or demand curve? Would there be an increase or decrease in quantity at each price? in which direction on ~ graph would the shift go? 1; A very convincing ad warns parents about the dangers of . children's watching too much television. 2. After a two-month strike, cable installers receive a $1 /hour raise. 3. A new cable company opens. " 4. The cost of renting VCR movies goes down. 5. New technology makes installing cable less expensive. -" .. 6. A large factory nearby lays off 2,000 workers. 7. Cable TV begltis a very popular children's program. 8. A cable TV transmitter is severely damaged bya storm and has to be replaced. a Nonprice. Factor Supply or Demand Increase or Decrease Direction of .Shift . .tastes and preferences demand curve . decrease left ":V- r '-.