https://www.forbes.com/sites/jimgorzelany/2021/07/19/very-used-cars-high-mileage-models-are-now-selling-for-big-bucks/?sh=54c603b8b9e6

Current Topic: Supply and Demand Homework News Article: Very Used Cars: High-Mileage Models are Now Selling for Big Bucks Link: https://www.forbes.com/sites/jimgorzelany/2021/07/19/very-used-cars-high-mileage models-are-now-selling-for-big-bucks/?sh=54c603b8b9e6 Description: Students will read a short article about changes in the used car market. They will then be asked to identify how these changes affect supply and demand, and graph the identified changes. Learning Objectives: 1. Interpret what is happening in the used car market into the technical language of economics (Shifts in supply/demand, substitutes/complements, etc.) 2. Graph the changes in the used car market. 3. Analyze what happens when 2 simultaneous shifts occur. 4. Evaluate how a change in the price of used cars affects current owners of used cars. Economics Vocabulary Used: Supply, Demand, Shift in Supply, Shift in Demand, Substitutes, Complements, Incentives Questions: Read the entire article, paying particular attention to the first 3 paragraphs. Then answer the questions as the article described. Use quotes when necessary. 1. From the article, what has happened to the average price of a used vehicle (with over 100,000 miles) over the last year? 2. From the article, how has the microchip shortage affected the new car market? a. A shift in demand to the right b. A shift in demand to the left C. A shift in supply to the right d A shift in supply to the left. 3. Based on your answer above, what has happened to the equilibrium price sold of new cars? a. Price has increased. b. Price has decreased C. No change in the equilibrium price. P Circle one: Used cars are a substitute/complement for new cars. How has the microchip shortage affected the used car market? A shift in demand to the right angau A shift in demand to the left A shift in supply to the right A shift in supply to the left. 6. According to the excerpt, what has happened to the supply of used vehicles and Why? 7. Using the graph below, graph the shift in question #5 on the graph below (the used car market). Be sure to label the new equilibrium price P2 and equilibrium quantity Q2 as well as El and E2. 8. Draw a new graph next to the one below and graph the shift in question #6. Be sure to label the new equilibrium price P2 and equilibrium quantity Q2 as well as the initial price and quantity and El and E2. The Used Car Mkt. - Q#5 S1 Q1 Qty./t 9. How does the change in the microchip market affect the incentives of current owners of used cars? (Have to read the entire article to answer this one.)