Equilibrium + Act. 15 & 16

I just sent out the notes on equilibrium from Wednesday, so check your inbox. They aren't long. Chapter 4 can help, too.

I've posted some in the comments sections to guide you along. Remember - two posts per week. I'm going to print the comments on Monday morning to grade. If you prefer, you could post in your own blog, but you might want to zap me an email to let me know you did that as a post.

For Act 15 Part B => It gives you something that has happened, and you need to determine what will happen to supply or demand of the good listed. So - the example they give is that a hurricane destroyed the apple crop in Connecticut. First, from the info given, would it affect supply or demand of the good for each number? Second, what would then happen to the price and quantity of that good? (HINT: draw in the graph to help you determine this)

So - for #7 on p. 76. If the apples in CN are destroyed by a hurricane, what would happen to apples in Boston? Supply or demand? Look for the first shift {Supply would decrease}. Draw in a new supply curve to the left of the one on the graph as the shift in supply. Compare the first equilibrium price and quantity to the second. What happens to price? {Increase} What happens to quantity? {Decrease}

Then, do #8. The different numbers do not necessarily go in order (so you don't have to assume that what happened in #7 leads to what happens in #8).

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For Activity 16:

Each "Figure" goes together (use "figure 16.1" for all parts under that, "figure 16.2" for all parts under that, etc).

For the first one - it talks about a new fertilizer, etc etc. Read through the whole thing. Then, look at the graphs and go down the column. So for the first graph, for potatoes: How does the new fertilizer affect potatoes? Does it change demand? {No, so circle the dash for demand, showing no change} Does it change supply? {Yes - it increases supply, so circle the "up" arrow for supply and draw in the new supply curve} What happens to price? {Down, so circle the "down" arrow} What happens to quantity? {Up, so circle the "up" arrow} .

Then, go on to the next column - "Bread". Use the information you have on potatoes, so assume that the price of potatoes has dropped and the quantity has increased to determine the changes in bread. After that, go on to "Wheat" and so on.

Try to finish through 16 by Monday! :)