Supply
Which perspective is represented by supply?
Producers
Which perspective is represented by demand?
consumers
Average Wages Increase for Workers Around the Country
How would this impact demand for consumer products? Which shifter would create this change?
Demand would increase (shift right) due to a change in income
The exclusive patent for a heart medication just expired, which allows for other companies to produce generic versions.
How would this impact supply of the heart medication? Which shifter would create this change?
Supply would increase (shift right) due to a change in the number of producers
Assuming all other things remain constant, what will happen to the price of a product if there is an increase in supply?
Price will decrease
As price increases, what happens to the quantity supplied?
Quantity Supplied Increases
As price increases, what happens to the quantity demanded?
Quantity demanded decreases
The legal drinking age was increase to 25.
How would this impact demand for alcohol? Which shifter would create this change?
Demand would decrease (shift left) due to a change in the number of consumers
A bakery is now using AI to complete numerous marketing tasks for a company that used to require human labor.
How would this impact supply of their baked goods? Which shifter would create this change?
Supply would increase (shift left) due to a change in technology
Assuming all other things remain constant, what will happen to the price of a product if there is an increase in demand?
Price will increase
What is supply?
The amount that producers are willing and able to produce at various prices (a range of prices)
What is Demand?
The amount that consumers are willing and able to consume at various prices (a range of prices)
Kim Kardashian was spotted wearing New Balance shoes, and now the New Balance Brand is becoming more popular.
How would this impact demand for New Balance shoes? Which shifter would create this change?
Demand would increase (shift right) due to a change in consumer tastes and preferences
Congress just passed an import tax on steel from China.
How would this impact supply for cars? Which shifter would create this change?
Supply would decrease (shift left) due to a change in government policy
Assuming all other things remain constant, what will happen to the price of a product if there is a decrease in supply?
Price will increase
What is the difference between supply and quantity supplied?
S = amount producers are willing and able to produce at various prices
QS = amount producers are willing and able to produce at a specific price
What is the difference between demand and quantity demanded?
D = amount consumers are willing and able to consume at various prices
QD = amount consumers are willing and able to consume at a specific price
A war has broken out in the middle east - Gas prices are expected to rise in 3 months
How would this impact demand for gas? Which shifter would create this change?
Demand would increase (shift right) due to a change in consumer expectations
The price of flour increased by 150% this year.
How would this impact supply of bread? Which shifter would create this change?
Supply would decrease (shift left) due to a change in the cost of inputs
Assuming all other things remain constant, what will happen to the price of a product if there is an decrease in demand?
Price will decrease
The law of supply says that as price increases the quantity supplied increases. Why is this the case?
Producers are motivated by profit, and, therefore, are willing to sell more of a product at higher prices
The law of demand says that as price increases the quantity demanded decreases. Why is this the case?
Consumers want to spend as little money, and, therefore, are willing to buy more of a product at lower prices
The price of peanut butter increased.
How would this impact demand for grape jelly? Which shifter would create this change?
Demand would decrease (shift left) due to a change in prices of related goods (complimentary)
Congress just passed a new law providing subsidies to Space X to do a space expeditions.
How would this impact supply for rockets? Which shifter would create this change?
Supply would increase (shift right) due to a change in government policy
Assuming all other things remain constant, what will happen to the price of a product if there is no change in supply or demand?
Price will stay the same/no change in price