Chapter 3A - Additional examples of supply and demand. This appendix provides additional examples of demand and supply analysis using real-world economic occurrences. This is helpful for those trying to understand or explain current events. | Chapter 3A Additional Examples of Supply and Demand Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. This appendix provides additional examples of demand and supply analysis using real-world economic occurrences. This is helpful for those trying to understand or explain current events. Lettuce Supply shifts left for lettuce Weather destroys part of the crop Demand doesn’t change Consumers still want as much lettuce as before Equilibrium price rises which will reduce the quantity demanded LO7 As a result of bad weather, the supply of lettuce decreases and shifts to the left, but demand has not changed because there haven’t been any changes in any of the determinants of demand. When supply decreases, equilibrium price increases and quantity falls. Exchange Rates Exchange rates are the price of one country’s currency in terms of another country’s currency Currency appreciation | Chapter 3A Additional Examples of Supply and Demand Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. This appendix provides additional examples of demand and supply analysis using real-world economic occurrences. This is helpful for those trying to understand or explain current events. Lettuce Supply shifts left for lettuce Weather destroys part of the crop Demand doesn’t change Consumers still want as much lettuce as before Equilibrium price rises which will reduce the quantity demanded LO7 As a result of bad weather, the supply of lettuce decreases and shifts to the left, but demand has not changed because there haven’t been any changes in any of the determinants of demand. When supply decreases, equilibrium price increases and quantity falls. Exchange Rates Exchange rates are the price of one country’s currency in terms of another country’s currency Currency appreciation Currency depreciation LO7 Currency appreciation means the value of one of the currencies, in terms of the other, has increased. Currency depreciation means the value of one of the currencies, in terms of the other, has decreased. Pink Salmon Supply shifts right for pink salmon New technology New fishers enter the industry Demand shifts left for pink salmon Increases in consumers’ income Reductions in the price of substitutes LO7 Supply shifts due to new technology which increases the catch and lowers the cost of fishing. High profits encourage new fishers to enter the industry. Demand shifts due to increases in consumers’ income causing them to shift away from canned fish such as pink salmon. Reductions in the price of substitutes for pink salmon, such as fresh salmon from the Atlantic, cause the demand for pink salmon to fall. Gasoline Supply of gasoline decreases Refinery breakdowns Mideast politics and warfare Rising price of oil Demand for gasoline increases Consumers’ .
