Supply and Demand Worksheets

The following events occur one at a time in the market for smartphones: -The price of a smartphone falls. -Producers announce that the price of a smartphone will fall next month. -The price of a call made from a smartphone falls. -The price of a call made from a land-line phone increases. -An increase. in memory makes smartphones more popular. Explain the effect of each event on the demand for smartphones.

-A fall in price increases the quantity of cell phones demanded but no effect on the demand for phones. -An expected fall in the price of a cell phone next month decreases the demand for phones today as people wait for the better price. -A fall in the price of a call on a cell phone increases the demand for cell phones because a cell phone call and a cell phone are complements. -A rise in the price of land-line phone calls increases the demand for cell phones because a land-line and a cell phone are substitutes. -With cell phones more popular, the demand for cell phones increase.

Lumber companies make timber beams from logs. In the process of making beams, the mill produces sawdust, which is made into pressed wood. In the market for timber beams, the following events occur one at a time: • The wage rate of sawmill workers rises. • The price of sawdust rises. • The price of a timber beam rises. • The price of a timber beam is expected to rise next year. • A new law reduces the amount of forest that can be cut for timber. • A new technology lowers the cost of producing timber beams. Explain the effect of each event on the supply of timber beams.

-A rise in workers' wage rates increases the cost of producing a timber beam and decrease the supply of timber beams. -A rise in the price of sawdust increases the supply of timber beams because sawdust and timber are complememnts in production. -A rise in the price of a timber beam increases the quantity of timber beams supplied but has no effect on the supply of timber beams. -An expected rise in the price of timber beams decreases the supply of timber beams today as producers hold back and wait for higher prices. -The new laws decrease the supply of timber beams. -The new technology increases supply of timber beams.

The following events occur one at a time in the market for smartphones: -The price of a smartphone falls. -Producers announce that the price of a smartphone will fall next month. -The price of a call made from a smartphone falls. -The price of a call made from a land-line phone increases. -An increase. in memory makes smartphones more popular. Does any event illustrate the law of demand?

A fall in the price of a cell phone (other things remaining the same), illustrates the law of demand. The other events change demand and don't illustrate it.

Lumber companies make timber beams from logs. In the process of making beams, the mill produces sawdust, which is made into pressed wood. In the market for timber beams, the following events occur one at a time: • The wage rate of sawmill workers rises. • The price of sawdust rises. • The price of a timber beam rises. • The price of a timber beam is expected to rise next year. • A new law reduces the amount of forest that can be cut for timber. • A new technology lowers the cost of producing timber beams. Does any event illustrate the law of supply?

A rise in the price of a beam, other things remain the same, is the only event that illustrates the law of supply.

Lumber companies make timber beams from logs. In the process of making beams, the mill produces sawdust, which is made into pressed wood. In the market for timber beams, the following events occur one at a time: • The wage rate of sawmill workers rises. • The price of sawdust rises. • The price of a timber beam rises. • The price of a timber beam is expected to rise next year. • A new law reduces the amount of forest that can be cut for timber. • A new technology lowers the cost of producing timber beams. Use a graph to illustrate the effect of each event.

In Figure 1, an increase in the supply shifts the supply curve from S0 to S1, and a decrease in the supply shifts the supply curve from S0 to S2. In Figure 2, the rise in the price of a beam creates a movement along the supply curve.

The following events occur one at a time in the market for smartphones: -The price of a smartphone falls. -Producers announce that the price of a smartphone will fall next month. -The price of a call made from a smartphone falls. -The price of a call made from a land-line phone increases. -An increase. in memory makes smartphones more popular. Use a graph to illustrate the effect of each event.

When the price falls, the quantity does with it. If the price rises, so will the quantity. So each event that involves a fall in price will guarentee that the quanitity produced will go down.