Simultaneous or Double Shift Practice

Simultaneous Changes in Demand and Supply Example: 1. Assume that the cost of steel for bicycles has gone down. 2. Assume that bike riding has become a very popular form of exercise. Which curves have shifted and why?

- Supply increased due to lower input costs (cost of steel went down). Answer - Supply increased due to lower input costs (cost of steel went down). - Demand increased because bike riding became more popular. How would this look on a graph?

Bicycles P S S1 p p1 D1 D Q q q1 q2 S  & D  .: P ? & Q ↑

Same situation, new look - Supply increased due to lower input costs (cost of steel went down). - Demand increased because bike riding became more popular. How would this look on the next graph?

Assume that You start at Point 1. With a Simultaneous increase in both Demand & Supply, at which number would you finish after the shifts.

You would end up at point 5 as shown to the right. This is the increase In Demand This is the Increase in Supply.

Simultaneous Changes in Demand and Supply Example: Assume that there has been a terrible hurricane in Florida which devastates the orange crop. Assume that people suddenly discover that eating oranges gives you really bad breath. Which curves have shifted and why?

Supply decreased due to a natural disaster. Answer Supply decreased due to a natural disaster. Demand decreased because most people dislike having bad breath. How would this look on a graph?

Oranges S1 P S p1 p D D1 Q q2 q1 q S  & D  .: P ? & Q↓

Assume that you start at Point 1. With a Simultaneous decrease in both Demand & Supply, at which number would you finish after the shifts.

You would end up at point 2 as shown to the right. This is the decrease In Supply This is the decrease in Demand.

Simultaneous Changes in Demand and Supply Example: Assume that there has been new technology developed that increases wheat production substantially. Assume that people more people suffer from wheat gluten allergies. Which curves have shifted and why?

Supply increased due to technology making Answer Supply increased due to technology making it more productive (more can be made in the same time). Demand decreased because fewer people bought wheat due to gluten allergies. How would this look on a graph?

Wheat P S S1 p p1 p2 D D1 Q q q1 S  & D  .: P↓ & Q?

Same situation, new look Supply increased due to technology making it more productive (more can be made in the same time). Demand decreased because fewer people bought wheat due to gluten allergies. How would this look on the next graph?

Assume that you start at Point 1. With a Simultaneous increase in Supply and decrease in Demand, at which number would you finish after the shifts.

You would end up at point 6 as shown to the right. This is the increase In Supply This is the decrease in Demand.

Simultaneous Changes in Demand and Supply Example: Assume that four computer manufacturers go bankrupt and cease production. Assume that computers become very popular. Which curves have shifted and why?

Supply decreased due to less competition Answer Supply decreased due to less competition Demand increased because computers are popular. How would this look on a graph?

Computers P S1 S p2 p1 p D1 D Q q1 q S  & D  .: P↑ & Q ?

Same situation, new look Supply decreased due to less competition or suppliers. Demand increased because computers are more popular. How would this look on the next graph?

Assume that you start at Point 1. With a Simultaneous decrease in Supply and increase in Demand, at which number would you finish after the shifts.

You would end up at point 4 as shown to the right. This is the decrease In Supply This is the increase in Demand.