Supply and Demand Assignment
• Visit http://www.bized.co.uk/learn/economics/markets/mechanism/interactive/part1.htm and read the material posted about supply and demand. Explore the concepts of supply and demand by using the interactive features on the graphs. Use the questions following the diagrams to guide your exploration. Visit parts 1, 2, & 3 of the Web site.
• Fill in the matrix and answer the questions in Appendix C. Describe how changes in price and/or quantity of various goods and services will affect either supply or demand and the equilibrium price. Use the graphs from the interactive activity as a tool to help you visualize the changes in price and quantity.
If the price of a good increases, what happens to demand?
The demand would decrease. The amount of decrease would be determined by the price elasticity of demand of the good.
If the price of a good decreases, what happens to supply?
The supply would drop because consumers would take advantage of the savings.
Does a change in price create curve shifts? Explain.
Yes, it is possible for price change to create curve shifts-for instance: a demand curve would result when a price increase in a good or service would cause a decrease in the quantity demand of that good or service where as a price decrease in a good or service would cause an increase in the quantity demand of that good or service. A supply curve would result when a price increase in a good or service causes an increase in quantity supply whereas a price decrease would in a good or service causes a decrease in quantity supply.
Market affected by event
Shift in supply, demand, or both. Explain your answer.
Change in equilibrium
Frozen orange crops in California
Supply (left)-Not as many available oranges to offer consumers.
Price will increase and quantity will decrease.
Hurricanes in the Gulf Coast
Gulf Coast tourism
Supply (left) - not as many tourist areas available to...