(A)

(B)
(C)
(D)

The S-curve shifts to the right.

The S-curve shifts to the left.
The S-curve doesnt shift. Qs increases.
The S-curve doesnt shift. Qs decreases.

(AB) The D-curve shifts to the right.

(AC) The D-curve shifts to the left.
(AD) The D-curve doesnt shift. Qd increases
(AE) The D-curve doesnt shift. Qd decreases

1 The price of bread goes up.

What happens to demand for butter?

2 Nike becomes very unpopular.

What happens to demand for Reebok?

3 You get a 10% pay cut.

What happens to demand for Normal Goods?

4 Polo (a clothes company) goes out of business.

What happens to supply of clothes?

5 A new tax is put on luxury cars.

What happens to the supply of luxury cars.

6 The price of iron goes down.

What happens to the supply of steel.

7 The price of new cars goes down.

What happens to demand for used cars?

8 The US puts a new quota on all Asian VCRs

What happens to the supply of VCRs?

9 The price of bread goes up.

What happens to the supply of bread?

10 The price of computers goes up.

What happens to demand for computers?

11 Nautica becomes even more popular.

What happens to demand for Polo?

12 Price of Mcdonald's food goes up?

What happens to the demand for B.K.?

Part 2 Supply or Demand. Answer if the following would affect supply or demand?
(A) Supply
(B) Demand
13 Income
14 A company going out of business/ business situation is weak
15 Compliments and Substitute Prices
16 Natural disasters
17 taste and preferences
18 Price of related goods
19 Producing technology
20a Taxes
20b Subsidies
Part 4 True-False

(a) True

(b) False

21 Demand Curves go from the upper left to the lower right.

22 To be able to DEMAND something you must be able to buy it and be willing to buy it.
23 Supply is defined as being willing and able to buy something
24 Milk and Cereal are substitutes
25 Because of Scarcity, we use a rationing device.
26 A Surplus is defined as when Qd > Qs

27 A price above the equilibrium price will produce a surplus.

28 Compliments are products that replace each other.
29 Qs and Price have an inverse relationship
30 Youre very easy to buy a product where there is a high demand for that product and low supply.
Part 5 Equilibrium Points - What happens to EP and EQ in the following situations. Use the key to
answer the questions
(A) EP Increases & EQ Increases (More D) (B) EP Increases & EQ Decreases (Less S)
(C) EP Decreases & EQ Increases (more S) (D) EP Decreases & EQ Decreases(LESS D)
This basically means I first have to decide if a problem is
MORE DEMAND ---- Graph Type A --- or Memorize .. Answer A
LESS DEMAND --- Graph Type B --- or Memorize .. Answer D
MORE SUPPLY--- Graph Type C --- or Memorize - Answer C
LESS SUPPLY --- Graph type D --- or Memorize - . Answer B
34 New fertilizer boosts crop production.
More Supply so answer C

What happens to Crops?

35 Beef becomes a major health concern.

Less Demand so Answer D

What happens to Beef?

36 A hurricane wipes out half the orange trees.

LESS SUPPLY so answer B

What happens to Oranges?

37 Ford Cars become a lot more expensive.

MORE DEMAND FOR GM so answer A

What happens to GM Cars?

38 The tax on alcohol is removed

More Supply of Alcohol so Answer C

What happens to Alcohol?

39 A quota starts preventing importing foreign cars.

LESS SUPPLY of cars so Answer B

What happens to Cars?

40 A new shoe company is founded

MORE supply so Answer C

What happens to Shoes?

41 The Red Wings win the Cup and become more popular.
MORE DEMAND so answer A

What happens to Red Wing Jerseys?

42 If people start buying more of a product.

MORE DEMAND so answer A

What happens to that product?

43 Bell bottoms very unpopular.

LESS DEMAND so answer D

What happens to Bell Bottoms?

On the 2 problems below both curves are moving. So either you have to graph both and move the line
that is stronger farther.. or as a short cut, just think about the stronger line.
44 Supply is decreasing more than demand is decreasing.
What happens to that product?
((Supply decrease is stronger in the tug-of-war than the demand decrease))
Supply Decrease makes prices go up,
quantity go down
Demand Decrease
prices go down
quantity go down

Together

Price the stronger wins

Quantity goes down for sure
(Supply)
So the answer Price goes up, Quantity goes down. So answer B
45 Demand increase 80%. Supply decreases 25%.
What happens to that product?
((Demand increase is stronger in the tug-of-war than the supply decrease))
Since Demand Increase is stronger, treat this just like only Demand is increasing ignore rest
MORE Demand == ANSWER A
Part 6 Shifting Curves. Based on the following information decide which way the other curve shifted
(A) Shifted Left (B) Shifted Right
46 If Supply stayed the same, what could happen to Demand to cause Quantity to go DOWN?
So Less Demand would make Less Quantity. Answer A
47 If Demand stayed the same, what could happen to Supply to cause Quantity to go DOWN?
So Less Supply would make Less Quantity Answer A
48 If Demand stayed the same, what could happen to Supply to cause Price to go DOWN?
So MORE Supply would make prices go down Answer B
49 If Supply stayed the same, what could happen to Demand to cause Price to go UP.
So MORE demand would cause prices to go up
Answer B
50 If Demand for Gas didnt change, what could happen to Supply to cause Price of Gas goes UP?
So Less Supply would cause prices to go up
Answer A

Part 2: Graphing. Put all answers on Graph Paper In this packet.

Part 7 Graphing. Make sure you use the labels wherever appropriate. (S1, S2, D1, D2, A, B)
Also next to each graph answer what happened in the graph to EP and EQ. (3 points per graph)
51 Demand shifting left.
Supply staying the same.
So on the OTHER ANSWER KEY TYPE B
52 Demand staying the same.
Supply increasing.
So on the OTHER ANSWER KEY TYPE C
53 Demand decreasing.
Supply decreasing.
So on the OTHER ANSWER KEY TYPE F
54 Demand increasing.
Supply shifting left.
So on the OTHER ANSWER KEY TYPE H
Part 8 Graphing.
A Supply/Chart that would illustrate the questions.
Make sure you use the labels wherever appropriate. (S1, S2, D1, D2, A, B)
Also next to each graph answer what happened to the missing piece (EP or EQ) (3 points per graph)
55 Demand stayed the same, so shift the Supply curve (S2) in order to make the EP go up.
So on the OTHER ANSWER KEY so less Supply to make prices go up. Type D
56 Supply Stayed the same, so shift the Demand Curve (D2) in order to make the EQ go up. Supply
stayed the same.
So on the OTHER ANSWER KEY so more demand would make Q go up TYPE A
Part 8 Read the following Graph. Answer 57 to 59 (1 point each)
57 What is the Equilibrium Price?
$4
58 What price is there a shortage at? Anything below equilibrium (2)
59 What price is there a surplus at?
Anything above equilibrium (6)
Part 9 - Short Answer. A couple words or perhaps 1 sentence is sufficient to answer the following:
60. What prevents companies from raising their price to whatever they want?
No one will buy it (no demand)
61. In what two ways, does supply and demand effect your life and your future.
1. Job/Income
2. Price you pay for stuff (everything you buy)
Part 10 Longer Answers. Do 2 of the 4 Questions. (Skip 63)
62 How do supply and demand work together to determine price.
1) Demand tries to buy cheap 2) Supply tries to Sell high 3) Together compromise at
Equilibrium
63 Explain why Gas prices go up AND down? Explain in Terms and Give Real Examples.

1. Higher Prices from MORE DEMAND like Holidays

2. Higher Prices from LESS SUPPLY like natural disaster
3. Lower Prices from LESS DEMAND like Winter
4. Lower prices from More supply like finding more oil
64. Explain why a some jobs make more money than other jobs. Use examples of professions.
Some jobs have a lower supply and higher demand than others.
Example: Professional Basketball players make more than teachers because there
are less supply of them, and Sports demands have a high demand for them to sell
tickets.