Graphing Supply and Demand Changes



Graphing Supply and Demand Changes

Instructions: For each scenario graph the appropriate change in supply or demand and then answer the questions that follow for each scenario.

1) On the graph below, show what an increase in demand could potentially look like and label the new demand curve D2. Also label the new equilibrium price E2.

|[pic] |1A) What could have caused this scenario? |

| |A decrease in the population |

| |Producers raising the price of their products |

| |The price of inputs in making a product become cheaper |

| |Oprah endorses the product being sold. |

| | |

| |1B) Circle what happened to each of the following AFTER the above|

| |scenario. |

| | |

| |P ↑ ↓ NC Qs/Qd ↑ ↓ NC |

| | |

| |Demand ↑ ↓ NC Supply ↑ ↓ NC |

| |

|2) On the graph below show an increase in Supply. Graph the new curve and label it S2. Also label the new equilibrium price E2. |

|[pic] |2A) What could have caused this scenario? |

| |A decrease in the population |

| |Producers raising the price of their products |

| |The price of inputs in making a product become cheaper |

| |Several businesses close their shops |

| | |

| |2B) Circle what happened to each of the following AFTER the above|

| |scenario. |

| | |

| |P ↑ ↓ NC Qs/Qd ↑ ↓ NC |

| | |

| |Demand ↑ ↓ NC Supply ↑ ↓ NC |

| |

| |

| |

| |

|On the graph below show a decrease in Supply. Label the new supply curve S2 and the new equilibrium price E2. |

|[pic] |3A) What could have caused this scenario? |

| |The price of oil increases from $100 to $150 per barrel. |

| |Companies make capital improvements – upgrade their machinery |

| |The price of a substitute good goes down. |

| |The price of a complementary good goes down. |

| |3B) Circle what happened to each of the following AFTER the above|

| |scenario. |

| | |

| |P ↑ ↓ NC Qs/Qd ↑ ↓ NC |

| | |

| |Demand ↑ ↓ NC Supply ↑ ↓ NC |

| |

| |

| |

|4) On the graph below show a decrease in demand. Label the new demand curve D2 and the new equilibrium price E2. |

|[pic] |4A) What could have caused this scenario? |

| |The price of oil increases from $100 to $150 per barrel. |

| |A new technology comes along allowing producers to create |

| |products quicker. |

| |The price of a substitute good goes down. |

| |The price of a complementary good goes down. |

| | |

| |4B) Circle what happened to each of the following AFTER the above|

| |scenario. |

| | |

| |P ↑ ↓ NC Qs/Qd ↑ ↓ NC |

| | |

| |Demand ↑ ↓ NC Supply ↑ ↓ NC |

| |

| |

| |

| |

|5) On the graph below show an increase in demand and supply. Label the new curves D2 and S2 and also label the new equilibrium |

|price E2. |

|[pic] |5A) What could have caused this scenario? |

| |An increase in the population and income. |

| |Producers raising the price of their products and Oprah endorsing|

| |the product. |

| |The price of inputs used in making a product go down and the |

| |population goes up. |

| |The price of a substitute good goes up and the government |

| |increases taxes on corporations. |

| | |

| |5B) Circle what happened to each of the following AFTER the above|

| |scenario. |

| | |

| |Qs/Qd ↑ ↓ NC |

| | |

| |Demand ↑ ↓ NC Supply ↑ ↓ NC |

| |

|6) On the graph below show an increase in demand and a decrease in supply. Label the new demand curve and supply curve D2 and S2 |

|and the new equilibrium price E2. |

|[pic] |6A) What could have caused this scenario? |

| |A decrease in the population and a rise in the price of inputs. |

| |Government increases taxes on businesses and decreases them for |

| |individual consumers. |

| |The price of inputs in making a product go down and peoples |

| |income goes up. |

| |Oprah endorses the product being sold and a new technology is |

| |developed for use in production. |

| | |

| |6B) Circle what happened to each of the following AFTER the above|

| |scenario. |

| | |

| |P ↑ ↓ NC |

| | |

| |Demand ↑ ↓ NC Supply ↑ ↓ NC |

| |

|7) On the graph below show what a decrease in demand and a decrease in supply would look like and label the new curves D2 and S2. |

|Be sure to label the new market clearing price E2. |

|[pic] |7A) What could have caused this scenario? |

| |A decrease in the price of a complimentary good and a decrease in|

| |government taxes on businesses. |

| |An increase in the price of inputs and an increase in people’s |

| |incomes. |

| |A surgeon generals warning about the product and an increase in |

| |the price of inputs. |

| |Decrease in population and income. |

| | |

| |7B) Circle what happened to each of the following AFTER the above|

| |scenario. |

| | |

| |Qs/Qd ↑ ↓ NC |

| | |

| |Demand ↑ ↓ NC Supply ↑ ↓ NC |

| |

|8) Show what a decrease in demand and increase in supply would look like. Be sure to label the new curves D2 and S2. Also, label |

|the new market clearing price E2. |

|[pic] |8A) What could have caused this scenario? |

| |An increase in people’s preference for the good and new |

| |technology used in production. |

| |A decrease in the price of oil and a decrease in the population. |

| |A decrease in people’s income and a decrease in the price of a |

| |substitute good. |

| |An increase in the price of the inputs and lower preference for |

| |the good. |

| | |

| |8B) Circle what happened to each of the following AFTER the |

| |change in demand. |

| | |

| |P ↑ ↓ NC |

| | |

| |Demand ↑ ↓ NC Supply ↑ ↓ NC |

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D1

S1

E1

D1

S1

E1

D1

S1

E1

D1

S1

E1

D1

S1

E1

D1

S1

E1

D1

S1

E1

D1

S1

E1

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