Transcript 1-1 Nets and Drawings

Supply and Demand
Objective: To understand how the supply and demand curve shifts
Warm-Up
1) How are the supply schedule and supply curve
related? Why does the supply curve slope upward?
2) Draw a graph with both supply and demand curves.
Suppose the price of sugar goes up because of a
hurricane. What happens to the supply of ice cream?
Show the curve shift.
Supply Shifts
Market for Leather Jackets
New Sewing Machines
Developed
Supply shifts to the right
because of a change in
technology
Leather Manufacture
goes out of Business
Supply shifts to the left because
of a decrease in the number of
suppliers/producers
Price of Lining Material
Rises
Supply shifts to the left because
of rising input costs
Tariffs on Imported
Leather Jackets, Impact
on Imports
Supply shifts left because of a
change in government policies
Mad Cow Disease Hits
US
Supply shifts to the left because
of a natural disaster, cows will
be destroyed, rather than come
to the market
Shifts in Supply or
Demand Curve
Draw a correct graph,
showing which curve
shifted and what
happened to price and
quantity.
Market: Coffee
Bountiful crop of Coffee Beans
Supply increases, shifts to
the right
Price falls, quantity
increases
Market: Automobile Industry
Workers in the Automobile
Industry receive a pay raise.
Supply shifts to the left
because of input costs rising
Price increases, quantity
falls
Market: Computer software
Price of personal computers
fall
Demand shifts to the right
because of the price of a
complement falls
Price rises, quantity
increases
Market: Pepsi Cola
Price of Coca Cola rises
Demand for Pepsi increases
because the price of a
substitute good rises
price increases, quantity
increases
Market: Second Hand Clothing
National Incomes Rise
Demand shifts to the left
because the change in
income causes a decrease in
demand for an inferior good
price falls, quantity falls
Market: Automobile Industry
Government gives GM and
Chrysler a subsidy
Supply shifts to the right
because of a change in
government policies
price falls, quantity
increases
Market: Corn
Price for irrigation
equipment falls
Supply increases because of
a change in technology
price falls, quantity
increases
Market: Any normal good
American’s Income falls 3
months in a row
Demand increases because
incomes rising and increase
in demand for normal goods
price falls, quantity
decreases
Market: TV Manufacturing
American TV production
closes its manufacturing
plant
Supply shifts left because of
decrease in number of
producers in the market
price increases, quantity
falls
Market: Any Inferior Good
American’s income rises 3
months is a row
Demand decreases because
as incomes rise, there is a
decrease in demand for
inferior goods
price falls, quantity falls