QUESTION IMAGE
Question
name(s)
date
market
situation
which one
would shift?
supply curve
or
demand
curve
which way
would curve
shift?
right
(increase) or
left
(decrease?
what shifter of
supply or demand
caused that
change?
oranges
an early frost
destroys much of
the crop
s
apples
a new pesticide
is developed
which controls
tent caterpillars
s
wine
the average
wage of grape
harvesters rises
by 10%
s
hospital
beds
scientists
discover a pill
that cures
cancer
d
cement
a 7.9 earthquake
hits san
francisco
d
bike helmets
the price of
bicycles goes
down
d
butter
mad cow
disease wipes
out a lot of dairy
cows
s
candles
an electric
company official
announces that
a computer bug
will likely result
in power outages
d
cowboy
boots
old navy
launches an ad
campaign called
everybody
wears boots
d
oreo
cookies
a malware virus
infected the
packaging
machines at
nabisco.
s
hot dog
buns
the price of flour
goes up
s
Oranges
Step1: Analyze supply - demand shift
An early frost destroys much of the crop. This affects the supply of oranges. Since the quantity of oranges available for sale at each price level decreases, the supply curve shifts.
Step2: Determine shift direction
When supply decreases, the supply curve shifts to the left. The shifter is the "natural disaster (frost)" which is a determinant of supply.
Apples
Step1: Analyze supply - demand shift
A new pesticide is developed which controls tent caterpillars. This will increase the productivity of apple production. Since more apples can be produced at each price level, the supply curve shifts.
Step2: Determine shift direction
When supply increases, the supply curve shifts to the right. The shifter is "technology (new pesticide)" which is a determinant of supply.
Wine
Step1: Analyze supply - demand shift
The average wage of grape harvesters rises by 10%. This increases the cost of production for wine. Since producers will supply less wine at each price level (because of higher costs), the supply curve shifts.
Step2: Determine shift direction
When supply decreases due to higher production costs, the supply curve shifts to the left. The shifter is "input prices (wages of grape - harvesters)" which is a determinant of supply.
Hospital Beds
Step1: Analyze supply - demand shift
Scientists discover a pill that cures cancer. This will reduce the need for hospital beds (as fewer cancer patients will need long - term hospital care). So, the demand for hospital beds changes.
Step2: Determine shift direction
When demand decreases, the demand curve shifts to the left. The shifter is "consumer tastes (less need for hospital beds due to cancer cure)" which is a determinant of demand.
Cement
Step1: Analyze supply - demand shift
A 7.9 earthquake hits San Francisco. After an earthquake, there will be a need for reconstruction, which increases the demand for cement.
Step2: Determine shift direction
When demand increases, the demand curve shifts to the right. The shifter is "number of buyers (increased need for reconstruction)" which is a determinant of demand.
Bike Helmets
Step1: Analyze supply - demand shift
The price of bicycles goes down. Bicycles and bike helmets are complements. When the price of a complement (bicycles) decreases, the demand for bike helmets increases.
Step2: Determine shift direction
When demand increases, the demand curve shifts to the right. The shifter is "price of related goods (price of bicycles)" which is a determinant of demand.
Butter
Step1: Analyze supply - demand shift
Mad Cow Disease wipes out a lot of dairy cows. Dairy cows are an input for butter production. With fewer dairy cows, the supply of butter decreases.
Step2: Determine shift direction
When supply decreases, the supply curve shifts to the left. The shifter is "input prices (number of dairy cows)" which is a determinant of supply.
Candles
Step1: Analyze supply - demand shift
An electric company official announces that a computer bug will likely result in power outages. Candles are a substitute for electric lighting during power outages. So, the demand for candles increases.
Step2: Determine shift direction
When demand increases, the demand curve shifts to the right. The shifter is "consumer expectations (expectation of power outages)" which is a determinant of demand.
Cowboy Boots
Step1: Analyze supply - demand shift
Old Navy launches an ad campaign called "Everybody Wears Boots". This ad campaign is likely to change cons…
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| Market | Which one would shift? SUPPLY CURVE or DEMAND CURVE | Which way would curve shift? RIGHT (increase) or LEFT (decrease)? | What shifter of supply or demand caused that change? |
|---|---|---|---|
| Apples | S | RIGHT | Technology (new pesticide) |
| Wine | S | LEFT | Input prices (wages of grape - harvesters) |
| Hospital Beds | D | LEFT | Consumer tastes (less need for hospital beds due to cancer cure) |
| Cement | D | RIGHT | Number of buyers (increased need for reconstruction) |
| Bike Helmets | D | RIGHT | Price of related goods (price of bicycles) |
| Butter | S | LEFT | Input prices (number of dairy cows) |
| Candles | D | RIGHT | Consumer expectations (expectation of power outages) |
| Cowboy Boots | D | RIGHT | Consumer tastes (ad - campaign) |
| Oreo Cookies | S | LEFT | Technology (malware - affected packaging machines) |
| Hot Dog Buns | S | LEFT | Input prices (price of flour) |