Demand is constant Demand increases Demand decreases

Supply is constant
P= Q= P= Q= P= Q=

Supply increases
P= Q= P= Q= P= Q=

Supply decreases
P= Q= P= Q= P= Q=
• If the demand and supply curves
for cookies are:
• D = 50 - 6P, S = 14 + 3P

where P is the price of each cookie

Plot 8 points only

• What is the equilibrium price?

• What is the equilibrium quantity?
• Illustrate what the effect is if the
price of each cookie cannot be
more than 2 pesos
• Illustrate what the effect is if the
price per cookie cannot be less
than 6 pesos
• Plot the supply and demand
schedules for the hypothetical Quantity Quantity
product in the table as supply Price
Demanded Supplied
and demand curves (pesos)
(units) (units)

10 5 25
– what is the equilibrium price
and quantity
8 10 20
– if preferences change and
people want to buy twice as
much as before at each price 6 15 15
plot the new curve and identify
what the equilibrium price and
2 20 10
quantity will be

0 25 5
Match the movement with the change described
*The demand for "Milo" chocolate Drink
• Movement • Change
–
– Movement along the Consumer income increases
– Succesful advertising by "Milo" on TV
demand curve – An increase in the price of tea
(upward/downward) – A decrease in the price of milk
–
– Movement of the News of research showing that drinking
chocolate improves your health
whole demand curve – A decrease in income taxes
to the right – An increase in the quantity demanded of
"Milo"
– Movement of the – "Milo" is on special at the supermarket
whole demand curve – The economy is in a severe recession
to the left – An increase in the price of "Milo"
– A story on the news about a woman who
found a piece of glass in a "Milo" packet
– A decrease in the price of Cadbury
chocolate drink
– "Milo" is found to be an ideal source of
energy for athletes
Match the movement with the change described
*The Supply of fish
• Change
• Movement – An increase in the price of boat fuel
– Movement along the – New and more accurate fish-finding technology
Supply curve – An increase in the price of fish
– The government imposes a quota on catching
(upward/downward) fish
– Movement of the – As a result of government regulations, additional
safety equipment is needed on all commercial
whole Supply curve to fishing boats
the right – An increase in workers wages
– The governement provides an export subsidy to
– Movement of the fishing operators
whole Supply curve to – The government creates new marine reserves
where commercial fishing was allowed in the
the left past
– As a result of overfishing fish stocks are
depleted
– Good weather conditions boost fish numbers
– There is a devastating typhoon that destroys
many fishing vessels