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Supply and Demand
Shifts in the Supply and Demand
curves result in changes in price
and quantity.
Demand Increases
• Demand Increases
• Demand Curve Shifts
Right
– In response to a higher
price, suppliers will
increase quantity supplied
at the higher price
***Quantity Demanded and
quantity supplied will
increase
P1
Price of ____
• Price Increases
• Quantity Increases:
Supply
P*
D1
Demand
Q*
Quantity of
Q1
Demand Decreases
• Demand Decreases
• Demand Curve Shifts Left
Supply
– In response to a lower
price, suppliers will
decrease quantity supplied
at the lower price
***Quantity Demanded and
Quantity Supplied will
Decrease
Price of ____
• Price Decrease
• Quantity Decreases
P*
P1
D1
Q1 Q*
Quantity of
Demand
Supply Decreases
• Supply Decreases
• Supply Curve Shifts Left
S1
– In response to a higher
price, demanders will
decrease quantity
demanded at the higher
price
***Quantity Demanded and
Quantity Supplied will
Decrease
P1
Price of ____
• Price Increases
• Quantity Decrease
Supply
P*
Demand
Q1 Q*
Quantity of
Supply Increases
• Supply Increases
• Supply Curve Shifts Right
Supply
– In response to a lower
price, demanders will
increase quantity
demanded at the lower
price
***Quantity Demanded and
Quantity Supplied will
Increase
Price of ____
• Price Decreases
• Quantity Increases
S1
P*
P1
Demand
Q*
Quantity of
Q1
In the market for wheat. A drought destroys much of the
wheat crop in Kansas and Nebraska
•
•
Supply Decreases
Supply Curve Shifts Left
Price Increases
Quantity Decrease
– In response to a higher price,
demanders will decrease
quantity demanded at the
higher price
***Quantity Demanded and
Quantity Supplied will
Decrease
S1
Supply
P1
Price of ____
•
•
P*
Demand
Q1 Q*
Quantity of
In the market for Redwood Lumber. Environmentalists
urge consumers to boycott redwood products.
•
•
Demand Decreases
Demand Curve Shifts Left
Supply
Price Decrease
Quantity Decreases
– In response to a lower price,
suppliers will decrease
quantity supplied at the lower
price
***Quantity Demanded and
Quantity Supplied will Decrease
Price of ____
•
•
P*
P1
D1
Q1 Q*
Quantity of
Demand
In the market for cigars. A new study shows that smoking
cigars results in lots of wrinkles
• Demand Decreases
• Demand Curve Shifts Left
Supply
– In response to a lower
price, suppliers will
decrease quantity supplied
at the lower price
***Quantity Demanded and
Quantity Supplied will
Decrease
Price of ____
• Price Decrease
• Quantity Decreases
P*
P1
D1
Q1 Q*
Quantity of
Demand
In the market for butter. The price of margarine goes up.
Demand Increases
Demand Curve Shifts Right
•
•
Price Increases
Quantity Increases:
– In response to a higher price,
suppliers will increase quantity
supplied at the higher price
***Quantity Demanded and
quantity supplied will increase
Supply
P1
Price of ____
•
•
P*
D1
Demand
Q*
Quantity of
Q1
In the market for paper. The price of wood pulp increases.
(Wood pulp is used to make paper.)
• Supply Decreases
• Supply Curve Shifts Left
S1
– In response to a higher
price, demanders will
decrease quantity
demanded at the higher
price
***Quantity Demanded and
Quantity Supplied will
Decrease
P1
Price of ____
• Price Increases
• Quantity Decrease
Supply
P*
Demand
Q1 Q*
Quantity of
In the market for Hula Hoops. Brad Pitt confides to People
Magazine that “he gets a big kick out of his Hula Hoop”.
• Demand Increases
• Demand Curve Shifts
Right
– In response to a higher
price, suppliers will
increase quantity supplied
at the higher price
***Quantity Demanded and
quantity supplied will
increase
P1
Price of ____
• Price Increases
• Quantity Increases:
Supply
P*
D1
Demand
Q*
Quantity of
Q1
In the market for Yachts. The average price of stocks falls
by over 20% between now and the end of the year.
• Demand Decreases
• Demand Curve Shifts Left
Supply
– In response to a lower
price, suppliers will
decrease quantity supplied
at the lower price
***Quantity Demanded and
Quantity Supplied will
Decrease
Price of ____
• Price Decrease
• Quantity Decreases
P*
P1
D1
Q1 Q*
Quantity of
Demand
In the market for gasoline. Large SUV’s like Suburbans
and Expeditions become more popular
• Demand Increases
• Demand Curve Shifts
Right
– In response to a higher
price, suppliers will
increase quantity supplied
at the higher price
***Quantity Demanded and
quantity supplied will
increase
P1
Price of ____
• Price Increases
• Quantity Increases:
Supply
P*
D1
Demand
Q*
Quantity of
Q1
In the market for umbrellas. Heavy rain is forecast.
• Demand Increases
• Demand Curve Shifts
Right
– In response to a higher
price, suppliers will
increase quantity supplied
at the higher price
***Quantity Demanded and
quantity supplied will
increase
P1
Price of ____
• Price Increases
• Quantity Increases:
Supply
P*
D1
Demand
Q*
Quantity of
Q1
In the market for gasoline. Two super-tankers collide.
• Supply Decreases
• Supply Curve Shifts Left
S1
– In response to a higher
price, demanders will
decrease quantity
demanded at the higher
price
***Quantity Demanded and
Quantity Supplied will
Decrease
P1
Price of ____
• Price Increases
• Quantity Decrease
Supply
P*
Demand
Q1 Q*
Quantity of
The price of hamburger increases
• NO CHANGE!!!
• There is only movement along the demand
curve
In the market of oranges. There is an early frost which
destroys much of the crop in Florida.
• Supply Decreases
• Supply Curve Shifts Left
S1
– In response to a higher
price, demanders will
decrease quantity
demanded at the higher
price
***Quantity Demanded and
Quantity Supplied will
Decrease
P1
Price of ____
• Price Increases
• Quantity Decrease
Supply
P*
Demand
Q1 Q*
Quantity of
In the market for apples. A new pesticide is developed
which controls tent caterpillars. (a threat to apples)
•
•
Supply Increases
Supply Curve Shifts Right
Supply
Price Decreases
Quantity Increases
– In response to a lower price,
demanders will increase
quantity demanded at the
lower price
***Quantity Demanded and
Quantity Supplied will
Increase
Price of ____
•
•
S1
P*
P1
Demand
Q*
Quantity of
Q1
In the market for wine. The average grape harvesters rises
by 10%.
• Supply Decreases
• Supply Curve Shifts Left
S1
– In response to a higher
price, demanders will
decrease quantity
demanded at the higher
price
***Quantity Demanded and
Quantity Supplied will
Decrease
P1
Price of ____
• Price Increases
• Quantity Decrease
Supply
P*
Demand
Q1 Q*
Quantity of
In the market for U.S. cars. The U.S. imposes a tariff on
Japanese car imports.
• Demand Increases
• Demand Curve Shifts
Right
– In response to a higher
price, suppliers will
increase quantity supplied
at the higher price
***Quantity Demanded and
quantity supplied will
increase
P1
Price of ____
• Price Increases
• Quantity Increases:
Supply
P*
D1
Demand
Q*
Quantity of
Q1
In the market for hospital beds. Scientists discover a pill
that cures cancer.
• Demand Decreases
• Demand Curve Shifts Left
Supply
– In response to a lower
price, suppliers will
decrease quantity supplied
at the lower price
***Quantity Demanded and
Quantity Supplied will
Decrease
Price of ____
• Price Decrease
• Quantity Decreases
P*
P1
D1
Q1 Q*
Quantity of
Demand
In the market for cement. A 7.9 earthquake hits San
Francisco. (Severe earthquake)
• Demand Increases
• Demand Curve Shifts
Right
– In response to a higher
price, suppliers will
increase quantity supplied
at the higher price
***Quantity Demanded and
quantity supplied will
increase
P1
Price of ____
• Price Increases
• Quantity Increases:
Supply
P*
D1
Demand
Q*
Quantity of
Q1
In the market for video rentals. The price of getting cable
T.V. goes up.
• Demand Increases
• Demand Curve Shifts
Right
– In response to a higher
price, suppliers will
increase quantity supplied
at the higher price
***Quantity Demanded and
quantity supplied will
increase
P1
Price of ____
• Price Increases
• Quantity Increases:
Supply
P*
D1
Demand
Q*
Quantity of
Q1
In the market for windshields. A new law is passed
requiring gravel trucks to cover their loads with tarps.
• Demand Decreases
• Demand Curve Shifts Left
Supply
– In response to a lower
price, suppliers will
decrease quantity supplied
at the lower price
***Quantity Demanded and
Quantity Supplied will
Decrease
Price of ____
• Price Decrease
• Quantity Decreases
P*
P1
D1
Q1 Q*
Quantity of
Demand
In the market for taxi service. Local subway workers go on
strike.
• Demand Increases
• Demand Curve Shifts
Right
– In response to a higher
price, suppliers will
increase quantity supplied
at the higher price
***Quantity Demanded and
quantity supplied will
increase
P1
Price of ____
• Price Increases
• Quantity Increases:
Supply
P*
D1
Demand
Q*
Quantity of
Q1
In the market for bicycles helmets. The price of bicycles
goes down.
• Demand Increases
• Demand Curve Shifts
Right
– In response to a higher
price, suppliers will
increase quantity supplied
at the higher price
***Quantity Demanded and
quantity supplied will
increase
P1
Price of ____
• Price Increases
• Quantity Increases:
Supply
P*
D1
Demand
Q*
Quantity of
Q1
In the market for melons. The cost of water goes up.
• Supply Decreases
• Supply Curve Shifts Left
S1
– In response to a higher
price, demanders will
decrease quantity
demanded at the higher
price
***Quantity Demanded and
Quantity Supplied will
Decrease
P1
Price of ____
• Price Increases
• Quantity Decrease
Supply
P*
Demand
Q1 Q*
Quantity of
In the market for jellybeans. The price of jellybeans goes
up
• NO CHANGE!!!
• There is only movement along the demand
curve
In the market for Oreo cookies. The price of milk
increases.
• Demand Decreases
• Demand Curve Shifts Left
Supply
– In response to a lower
price, suppliers will
decrease quantity supplied
at the lower price
***Quantity Demanded and
Quantity Supplied will
Decrease
Price of ____
• Price Decrease
• Quantity Decreases
P*
P1
D1
Q1 Q*
Quantity of
Demand
In the market for Burger King Whoopers. McDonalds
lowers the price of Big Mac’s.
• Demand Decreases
• Demand Curve Shifts Left
Supply
– In response to a lower
price, suppliers will
decrease quantity supplied
at the lower price
***Quantity Demanded and
Quantity Supplied will
Decrease
Price of ____
• Price Decrease
• Quantity Decreases
P*
P1
D1
Q1 Q*
Quantity of
Demand
In the market for hot dogs. 60 Minutes does an expose
called “The truth about hot dogs”.
• Demand Decreases
• Demand Curve Shifts Left
Supply
– In response to a lower
price, suppliers will
decrease quantity supplied
at the lower price
***Quantity Demanded and
Quantity Supplied will
Decrease
Price of ____
• Price Decrease
• Quantity Decreases
P*
P1
D1
Q1 Q*
Quantity of
Demand
In the market for hot dog rolls. The price of flour rise.
• Supply Decreases
• Supply Curve Shifts Left
S1
– In response to a higher
price, demanders will
decrease quantity
demanded at the higher
price
***Quantity Demanded and
Quantity Supplied will
Decrease
P1
Price of ____
• Price Increases
• Quantity Decrease
Supply
P*
Demand
Q1 Q*
Quantity of
In the market for butter. Mad Cow Disease wipes out a lot
of dairy cows.
• Supply Decreases
• Supply Curve Shifts Left
S1
– In response to a higher
price, demanders will
decrease quantity
demanded at the higher
price
***Quantity Demanded and
Quantity Supplied will
Decrease
P1
Price of ____
• Price Increases
• Quantity Decrease
Supply
P*
Demand
Q1 Q*
Quantity of
In the market for candles. An electric company official announces that
a computer bug will likely result in power outages.
• Demand Increases
• Demand Curve Shifts
Right
– In response to a higher
price, suppliers will
increase quantity supplied
at the higher price
***Quantity Demanded and
quantity supplied will
increase
P1
Price of ____
• Price Increases
• Quantity Increases:
Supply
P*
D1
Demand
Q*
Quantity of
Q1
In the market for cowboy boots. Old Navy launches an
advertising campaign called “Everyone in Cowboy Boots”.
• Demand Increases
• Demand Curve Shifts
Right
– In response to a higher
price, suppliers will
increase quantity supplied
at the higher price
***Quantity Demanded and
quantity supplied will
increase
P1
Price of ____
• Price Increases
• Quantity Increases:
Supply
P*
D1
Demand
Q*
Quantity of
Q1