Answer the following questions with a graph and an analysis (or the causation) of the sequence of events of how eachshock impacts one of the determinants of supply or demand, then show how

it shifts the supply or demand curve to generate a new equilibrium price and the quantity. Make sure to answer each question with its own separate graph that includes both supply and demand with its initial equilibrium price and quantity (labeled as P1 and Q1) and then the shift in either the supply or demand curve (not both) to find the new equilibrium price and quantity (labeledas P2 and Q2)to answer the question.

The graphs are worth

1/2 the points and the analysis or causation is worth 1/2 the points.

1)Using the information below, Draw the Demand and Supply Curves for Candy Bars and find the equilibrium price and quantity. Hint: Demand goes down to the ground and Supply goes up to the sky.

Demand

P Q

$1.25 1

$100 2

$0.75 3

$0.50 4

$0.25 5

Supply

P Q

$1.25 8

$1.00 7

$0.75 5

$0.50 3

$0.25 1

Now show what happens to the equilibrium price and quantity due to the following events or shocks. Each shock will impact either one of the 5 determinants of Demand and shift the demand curve or it will impact one of the 6 determinants of Supplyand shift the

supplycurve.

Hint: Increases in supply or demand shift the curve to the right and decreases in supply or demand shift the curve to the left. (Less:left). Makesure you do a separate graph for each event/question starting with the initial equilibrium and then showing the

shift in eitherthe supply and demand curve. Then make sure that you show the new equilibrium price and quantity. You can leave it in thegeneral formand use P1 and Q1 for your initial equilibriumprice and quantity and P2 and Q2 for the new price and quantity.

2) candy stops heart disease

3) the price of chocolate increases

4) Tech. advances in how candy is made

5) we tax candy.

Again,make sure to draw a graph for each question that starts with supply and demand and the initial equilibrium price (P1) and quantity (Q1)