Friday, February 15, 2008

Supply & Equilibrium

Just one animated gif file on this one:

Some questions to think about:

(1) Do these things affect the demand or supply of oil? (a) The Alaskan oil pipeline was completed. (b) Price supports were removed from oil. (c) Oil was discovered in the Bering Sea. (d) Sport utility vehicles become more popular. (e) The use of nuclear power declined.

(2) Why is it more expensive to ski in Aspen in January than in April?

(3) Demand or supply of jeans? (a) A new technology becomes available that cuts the time to make jeans in half. (b) The price of denim falls. (c) Jeans go out of fashion. (d) The price of a pair of jeans falls. (e) The wage rate paid to garment workers increases. (f) People's income increases.


JoelleBender said...

Question #2: It's more expensive to ski in January than in April because the snow is better, therefore more people want to go. By April the conditions aren't that great, and only those who really want to get on last ski trip in (those freaks like myself) will be willing to spend a day in the slush. If the price stays the same in April, then those last stragglers won't even bother to go because they know the conditions won't be that great anyway, so why pay full price for them? In January the crowds come and one goes with an expectation that everything will be up to par, thus they are willing to pay the full price.

JOSH said...

I agree with joelles idea. i think that this deals with supply. as quantity supplied goes up (this could be either the actual amount of snow or, like joelle said, the quality of the snow)the cost goes up. this would be an example of january when there is fresh powder and everyone wants to ski. in april, it gets more "crystally" (a word i don't think you'll find in the dictionary) and icy, which is the quanity supplied dropping and the prices therefore dropping.

Lydia said...

number 3

a. supply, because a producer will now be able to supply a quantity twice as big with the same amount of resources

b. supply, falling input costs allow producers to supply more of a good at the same cost to them

c. demand, because of a change in taste, consumers will be willing to purchase less pairs of jeans at any price

d. demand, demand will increase because of a simply movement along tthe demand curve.

e. supply, wages count as an input cost, and increasing input costs means a producer will not be able to supply as much as they used to

f. demand, as peoples income increase, so does their ability to purchase normal goods such as jeans, shifting the whole curve to the right

BethanyStoppel said...

Question #1. A) The completion of the Alaskan pipeline would affect the quantity supplied. The total population of oil would increase.
B) Removing price supports would affect the demand of oil. C) Discovering oil in the Bering Sea would increase the quantity supplied of oil. D) An increase of popularity in sport utility vehicles would affect the demand for oil. E) A decline in the use of nuclear power would increase a demand for oil.

BethanyStoppel said...

Question #2. It's more expensive to ski in Aspen in January because the demand for that location is higher and people are willing to pay more for a vacation to Aspen in January. Skiing conditions are better so the incentive to go is higher than in April. Also, traffic is higher in January than April. This is why flights and hotel rates are more expensive on weekends.

Laura said...

A.Supply will go up since now more jeans can be made in the same amount of time
B.Supply. More jeans will be made for the same cost input.
C.Demand. Less jeans will be bought since nobody wants to be out of style.
D.Quantity Demanded, if the price changes the quantity demanded changes inversely (sales will go up).
E.Supply will go down since more cost will be put into every pair.
F.Demand. People will be able to buy more pairs of jeans since they now have more money.

JOSH said...

Question 3
A)Supply. It affects the production of the jeans.
B)Supply. Cost of producing the jeans
C)Demand. Affects how many people want jeans.
D)Demand. How much people will pay for a pair of jeans.
E)Supply. Affects how much the production of jeans costs.
F)Demand. Affects consumer income, people who buy the jeans.

Lucas S. said...

Response to #3:

a). This refers to supply as this enhanced technology allows for the same output, utilizing the same amount of resources, all in half the time.

b.) Once again this is a situation involving supply but this time with input prices. Now more jeans can be supplied but the cost to producers is kept constant.

c.) Here is where demand comes into play as a change in consumer taste will yield a decrease in jeans purchased- not much the producer really has control over.

d.) This refers to demand again but more specifically the quantity demanded. Graphically, there will simply be a movement along the demand curve in where decreased price equals higher demand.

e.) Supply; In this case, the idea of input price comes into affect again as more money being invested into the payment of workers obviously yields less to be used towards production. Supply will therefore go down.

f.) This affects demand. Increased income creates an entire shift in the demand curve to the right as consumers can now simply purchase more of the same goods that they would previously buy.

johndav said...

In response to number 3:

(a) SUPPLY. Applying the improved technology, the suppliers of jeans will be able to produce twice as many jeans as they once were able to.

(b) SUPPLY. Now that the price of the resources utilized has decreased, a constant budget will be able to allow for increased input in the jean-making process.

(c) DEMAND. Remaining one of the prominent determinants of demand, consumer tastes will unquestionably affect the quantity demanded; in this case, less people will want out-of-style clothing.

(d) DEMAND. According to the demand curve, as the price for a pair of jeans falls the quantity demanded will increase. More people will want to buy cheaper jeans.

(e) SUPPLY. If the budget of suppliers remains constant, more money to garment workers means there is less money to produce jeans with.

(f) DEMAND. If people possess more money they can buy more jeans. Consumer income is a determinant of demand.

Lucas S. said...

Question #2: The second sentence of Josh's comment is the most critical here. Suppliers logically will post higher prices when the quantity being supplied is at its peak. In this case, the ski company realizes that January is in the heart of the winter weather and the conditions will definitely attract the optimal number of skiers. Like Joelle said, a skier likely will be willing to pay any rational price knowing that the experience is at its pinnacle given the high quality of snow, temperature, etc. On the other hand, a ski trip in April just doesn't bode from the viewpoint of the skier. Although I've never personally skied, I can relate to the snow conditions and the tendency for the weather to begin flucuating more come March and April. Thus, a last minute skier will concentrate more on searching for a good deal than they would in January; price now becomes a factor. The company obviously understands this which exemplifies how prices must be dropped when quantity supplied drops.

belzmat said...

Right along with many of the peope commenting on question #2, I believe that people will be more willing to dish out top dollar in Aspen during January, because the snow is at its greatest then, and therefore will bring about the most amount of people flooding to the area. In April the quality of the snow will be hit or miss depending upon the snowfall in the region.

magila said...

(3) Demand or supply of jeans? (a) A new technology becomes available that cuts the time to make jeans in half. (b) The price of denim falls. (c) Jeans go out of fashion. (d) The price of a pair of jeans falls. (e) The wage rate paid to garment workers increases. (f) People's income increases.

A) Supply - the jean company is able to make the same amount of jeans in half the time, thereby doubling their jean production.

B) Supply - They can purchase more denim for the same price and can therefore make more jeans.

C) Demand - the demand curve will move to the left. jeans will stay the same price, but people will buy fewer of them and start buying khakis or something.

D) Quantity Demanded - There will be a moment along the current curve and as price falls, more jeans will be purchased.

E) Supply - It will cost more for suppliers to make the jeans because their workers have to be paid more.

F) Demand - while prices of jeans will stay the same, people will start buying more with their higher income.

caitlin said...

a) Supply; By creating a new pipeline oil suppliers will be a able to get at more oil, therefore supplying more oil.

b) Demand; When you remove price supports people will want to buy more oil because it will be cheaper.

c) Supply; There will be a larger amount of oil that can be used, so supply will increase.

d) Demand; When more people decide to buy more sport utility vehicles, they will need more oil. There will be an increase in demand.
e) Demand; Since the use of nuclear power declined people will look else where for a similar product. Oil will be most likely, so there will be an increase in demand for oil.

caitlin said...

It is more expensive to ski in January, because the quantity supplied will be increased which has a positive correlation with price. This will cause the price to increase. The quantity supplied will increase, because the ideal ski conditions will be met. Snow will have an increase in supply, with an increase in natural snow. People will also be willing to pay the price because they know when they go to the Aspens in may they will be able to ski everyday they are there, where as in April you may be trying to ski on brown grass.

JohnKotz said...

In January the demand for a quality ski hill will be greater than in April so the price will be greater while in April the demand goes down so the price too is lower. Also the quality of skiing in January will be higher in January than April so the price can be higher.

JohnKotz said...


A) Supply because the amount of good produced during the same amount of time increases.

B) Supply because the cost to make it is now less.

C) Demand as this s a consumer preference.

D) This also is demand as people will buy more.

E) Supply because it now costs more to make a pair of jeans.

F) Demand as consumers can now purchase more with their increased income.

taylork said...

2. People will be willing to pay more to ski in January instead of April, beccause the weather will be better, and so will the snow. A lot of people will not be willing to pay the same amount to ski in April as in January, because those people that have skiied before are going to know that they won't be getting their money's worth if they pay the same amount to go in April that they do to ski in January.

Katie Erickson said...

Question 2:
It is much more exspensive to ski in Aspen in January rather than april because there is more snow in Aspen in January than there is in April, causing better skiing conditions and drawing more crowds to the slopes. When more people want to ski (the demand for lift tickets rises) the price of a lift ticket will rise as well, because as demand rises, price also rises. By lowering ticket prices in April when the weather is warmer and there is less snow, some people will ski regardless of the conditions for a cheaper price. This way, the ski hills can maximize their profit at either time of year.

Katie Erickson said...

1. A) supply; there will be more oil available more readily to the US and nearby oil buyers.
B)what are price supports?? supply?
C) Supply- there is more oil available and supply increases
D)Demand-SUV's consume more gas than other vehicles, causing an increase in demand for gas.

taylork said...

3.a) supply, technology allows time spent to decrease, so more jeans can be made in same amount of time.
b) supply, if input cost decreases, supply will increase
c) demand; if jeans go out of fashion, less people will want to buy them
d) demand, if price drops people will buy more jeans
e)supply, wage rate is an input cost, so if input increases, then supply will decrease
f) demand, if people get more money, their ability to purchase goods, such as jeans, will increase

Katie Erickson said...

3. A)Supply

johndav said...

In response to question 2:

Considering that the snow and overall quality of the conditions are better in January, people will typically be willing to pay more knowing that their trip will be worthwile. As the demand increases, price will increase. Likewise, in April, as the conditions become slushy and undesireable, only the most avid of skiiers will want to ski. The demand here is definately less, therefore the ski resorts can't afford to turn away potential buyers with a relatively higher price; price decreases.

johndav said...

Demand or Supply of Oil? Answers:

(a) SUPPLY. More oil may be transported.

(b) SUPPLY. The suppliers don't have as many limitations as they did when price supports were in effect.

(c) SUPPLY. Finding a new source of oil increases the total amount that may be supplied.

(d) DEMAND. If SUVs are more popular, that means the oil that's needed to run them adopts a higher demand as well.

(e) DEMAND. The use or lack of use of another substitute (an additional source of power) means that people will have to rely on additional means for obtaining power.