Draw the supply and demand models for each given scenario. Be sure to label all your axis, curves, prices, and quantities.

 

1. Using a diagram, explain what will happen to the demand for bread if the price of butter increases.

2. Using a diagram, explain what will happen to demand for Coke Cola if the price of Pepsi increases.

3. Using a diagram, explain what will happen to the supply of bread if the cost of flour increases.

4. Using a diagram, explain what will happen to market for college-educated labor if the demand for labor increases and the cost of tuition decreases. (double shift rule)