Examples in Supply and Demand
This week we discussed supply and demand including the factors that may shift or cause movement along the curves. The following exercises are meant to help you better understand the graphical representations of these effects on the demand and supply curves. Each problem will provide you with an example of a factor. Your job is to determine if it will shift the demand curve or supply curve and the effects on quantity demanded, quantity supplied, and price. Please show all work.

1.) John gets a part-time job off campus to earn extra money so he can eat out more often at Uncle Wiggly’s as opposed to eating at the dining hall. What happens to John’s demand for Uncle Wiggly’s? Which good is the normal good and which good is the inferior good? What happens to John’s demand for dining hall food?

2.) A trade agreement with Venezuela increases the costs to coffee breweries for coffee beans. What happens in the market for brewed coffee? Which curve shifts? What happens to quantity supplied, quantity demanded, and price?

3.) Maggie Moo’s Ice Cream opens a store on York Road. What happens in the ice cream market?

4.) A food and drug report tells consumers eating at least one orange a week may increase your life expectancy. What happens in the market for oranges?

5.) Maryland decides to enact legislation forcing all delis to applying for a special license for serving processed meat on premises. This new license is very expensive and some smaller delis are having trouble purchasing the license. What happens to the market for deli sandwiches?

6.) Blu-ray players in the last few years have been coming down in price. What happens to the demand for blu-ray DVDs? What happens to the price?

Examples in Supply and Demand This week we discussed supply and de...