‘When it says “Type E” you have to look at the other answer key which has pictures of graphs and see what it should look like. 1. ‘Type E (2 curves have anything answer) Inc Dem =(P up Q up) + Inc Supply (P Do Qup) = IncD & IncS = P Anything QUp 2. ‘Type H (2 curves have anything answer) up Qup) + Dec Supply (P Up Q do)= IncD& DecS = P Up QAnything 3. TypeA Inc Dem = (P up Qup) since supply stayed same. 4, ‘Type G (2 curves have anything answer) Dec Dem= (P do Qdo) + Inc Supply (P Do Qup) = DecD& IncS = P do Q Anything 5. Type F (2 curves have anything answer) DecDem= (P do Q do) + DecSupply (P up Q do)= DecD& DecS = PAnything QDo 6. TypeB Dec Dem = (P do Qdo) since supply stayed same. 7. Type Inc Supply = (P down Q up) since demand stayed the same 8. TypeD Dec Supply = (P up Q down) since demand stayed the same 9, Obviously nothing changed 10. Notice in problems 1 & 4 if you move both Supply and Demand SAME direction (either inc or dec) than they fight over price and price is Anything U1. Notice in problems 2 & 5 where if Supply and Demand move OPPOSITE directions (one inc while other dec) than they fight over quantity and quantity is Anything 12 Since supply steyed the same, demand would have had to decrease to make EQ go down, The graph looks like Type B (Price down and Quantity down) 13 Since demand stayed the same, supply would have had to decrease to make EQ go own, The graph looks like Type D (Price up and Quantity down) 14 Since supply stayed the same, demand would have had to decrease to make EP go down, The graph looks like Type B. (Price down and Quantity down)15 Since demand stayed the same, supply would have had to increase to make EP go down. The graph looks like Type C (Price down and Quantity up) All of 16-23 only directly shift one curve and only one curve. 16 Less Supply Looks Like ‘Type D EP Inc EQ Dec 17 More Supply Looks Like Type C EP Dec EQ Inc 18 More Demand Looks Like Type A EP Ine EQ Inc 19 More Supply Looks Like Type C EP Dec EQ Inc 20 More Supply Looks Like Type C EP Dec EQ Inc 21 Less Demand Looks Like Type B EP Dec EQ Dec 22 More Demand Looks Like Type A EP Ine EQ Inc 23 Less Demand Looks Like Type B EP Dec EQ Dec 24) 5 Factors that Shift Demand (all listed on page 17 in your packet) 1) Income —_2) Preferences 3) Substitutes (Related Good) 4) Compliment (Related Good) 5) Expectations (in future) 25. 7 Factors for Supply (all listed on page 19 in your packet) 1)) Resource Prices 2) Productivity (like Nature) 3) Producing Technology 4) Govt taxes 5) Govt Régulation like Quota 6) Expectation 7) # of Sellers 26) Secret Trick is if it mentions: Price and Supply of Same Product = No Shift Supply Price and Demand of Same Product = No Shift Demand 27) Compliments like Milk&Cereal or bread&butter or peanut butter&jelly or etc 28) Substitutes like Coke&ePepsi, or Ford&GM or Nike&Addias 29) Because no one would buy at high prices (or less demand) 30) Because no one would sell at low prices (low supply) 31) We divide up resources by Price & Money 32) Any altemate method like appearance, first/come first serve wouldn't be better for everyone as there are always “winners’ and “losers” 33) Since we have to divide up resources because of scarcity. 34) Any price below equilibrium makes a shortage 35) Any price above equilibrium makes a surplus 36) QS > QD is a surplus 37838) Make any Supply/Demand Graph. Draw a Horizontal Price Line above the Equilibrium Price this will be a SURPLUS Draw a Horizontal Price Line below the Equilibrium Price this will be a SHORTAGE, 39 F (Willing and able) 40 F (those are compliments) ALT. P Juice Dec people buy more juice so they buy less of a substitute (so the substitute demand shifts left) 42: If asked how supply and demand work together to form price mention all of the following (Would need all 3 for full credit) A) Supply tries to sell highB) Demand tries to buy cheap ©) This forces a compromise at equilibrium