1. 5 Steps to Graphing Heaven Step 1- Draw the starting S and D Graph D S 0 Price (P) Quantity (Q) P0P0 Q0Q0 A. Draw the axes B. Label the axes C. Draw the curves D. Label the curves E. Find the intersection F. Label the starting price (P 0 ) and quantity (Q 0 )

2. 5 Steps to Graphing Heaven Step 2- Read the situation and answer questions 1, 2, and 3 Situation- Consumers love big screen TV’s. What impact does this have on the price and quantity of big screen TV’s? 1. Which determinant of supply or demand is affected? Refer to #14 & 15 on your notes! Demand Determinants (SEPTIC)Supply Determinants (GETNoCredit) 1.Substitutes 2.Expectations 3.Population 4.Taste 5.Income 6.Complements Government Policies Expectations Technology Number of Suppliers Cost of Production Taste!

3. 5 Steps to Graphing Heaven Step 2- Read the situation and answer questions 1, 2, and 3 Situation- Consumers love big screen TV’s. What impact does this have on the price and quantity of big screen TV’s? 2. What is affected supply or demand? 3. Which way does the curve shift? Demand! Away from 0, from D 0 to D 1

4. 5 Steps to Graphing Heaven Step 3- Draw the shift and label everything D0D0 S 0 Price (P) Quantity (Q) P0P0 Q0Q0 D1D1 P1P1 Q1Q1

5. 5 Steps to Graphing Heaven Step 4- Answer question 4 D0D0 S 0 Price (P) Quantity (Q) P0P0 Q0Q0 D1D1 P1P1 Q1Q1 4. Movement along which curve? ∆Qs; Movement along the S curve.

6. 5 Steps to Graphing Heaven Step 5- Answer questions 5 (both parts) D0D0 S 0 Price (P) Quantity (Q) P0P0 Q0Q0 D1D1 P1P1 Q1Q1 5. What happens to price? Price increases from P 0 to P 1.

7. 5 Steps to Graphing Heaven Step 5- Answer questions 5 (both parts) D0D0 S 0 Price (P) Quantity (Q) P0P0 Q0Q0 D1D1 P1P1 Q1Q1 5. What happens to quantity? Quantity increases from Q 0 to Q 1.

8. Determinants of Demand and Supply 11. Determinants of Demand: Reasons for Change/ Shift in Demand (SEPTIC) A change in: Price of Substitutes- things that replace each other: pork v. beef, pinto beans vs. black beans, TV shows and video rentals (If P of Substitute ↑, D for other good ↑) (If P of A ↑, D for B ↑). Consumer Expectations-if they expect a change in prices or their income

9. Determinants of Demand and Supply 11. Determinants of Demand: Reasons for Change/ Shift in Demand (SEPTIC) A change in: Population: Number of consumers, more or less people Consumer Taste- preferences, styles, fads, fashion, health, advertising, popularity

10. Determinants of Demand and Supply 11. Determinants of Demand: Reasons for Change/ Shift in Demand (SEPTIC) A change in: Income (y) (If Y ↑, D ↑. If Y↓, D↓) Steak, Sports Car Price of Complements- things that go together: ketchup and fries; movies and popcorn, cars and gasoline (If P of Complement ↑, D for other good ↓) (If P of A ↑, D for B ↓).

11. Determinants of Demand and Supply 12. Determinants of Supply: Reasons for Change/ Shift in Supply (GETNoCredit) A change in: Expectations- businesses expect a change to occur to sales, profits, etc. Government Policies - taxes, regulations,tariffs, quotas, setting prices, or any other government action.

12. Determinants of Demand and Supply 12. Determinants of Supply: Reasons for Change/ Shift in Supply (GETNoCredit) A change in: Technology- increases the efficiency of your natural, human, capital, and entreprenuership resources. Number of Suppliers- Companies entering or leaving the market.

13. Determinants of Demand and Supply 12. Determinants of Supply: Reasons for Change/ Shift in Supply (GETNoCredit) A change in: Costs of Production- anything that increases or decreases the cost of your land, labor, capital, and entrepreneurship.