Junior Achievement Inc. The Economic Nefus Circulation 500,000 Being Resourceful Let's consider natural gas. We may now use these sound waves to What kinds of things do you take for take it for granted, but many people construct three-dimensional pictures granted? One of them is probably hot and businesses are working hard to of the underground material. The water. When you turn on the hot supply it for us. They also are pictures provide much more water tap, you expect water to come continually looking for better, less information about where and how to out hot. But it does so only because costly ways of producing and drill for natural gas of something else you take for distributing natural gas. granted: energy. The hot water heater As a result, companies can avoid dry in your house or apartment uses Energy companies have long used wells and can extract more gas from either electricity or natural gas to sound waves to study the the successful wells they drill. These generate heat. underground structure of the earth. changes, in turn, reduce the marginal With computers, however, they can cost of producing natural gas. Answer each of the following questions: 1 . Does the article illustrate the price effect on supply or a change (shift) in supply? Explain. 2. Construct a graph of supply to illustrate your answer. Price 3. By developing and using new technologies to find and extract natural gas, energy companies can increase the quantity of so- called proved reserves. Proved reserves of natural gas are the Quantity of natural gas estimated quantities that companies can profitably extract at current prices using current technologies. Would an increase in proved reserves of natural gas mean that we have increased the quantity of our scarce resources? Explain.ECONOMIC SKILLS LAB TABLE TALK-INTERPRETING DATA The following graph presents the monthly supply of computers. Supply Curve of Computers $3500 $3000 12500 $2000 $ 1500 1000 2000 3000 4000 5000 6000 Quantity of computers per month 1. Use the graph above to complete the first two columns of the following table. Monthly Supply of Computers Price per Computer Quantity per Month New Quantity per Month $1,000 1,000 2,000 2. Assume that 1,000 more computers are supplied at each and every price. Complete the third column of the table and use the information to plot the new supply curve on the graph. a. Suppose the price of computers had been $2,500 before the supply curve shifted. How many computers were supplied at that price? b. Suppose the price of computers is $2,000 after the supply curve shifts. How many computers are supplied at this lower price? C. More computers are produced and sold at the lower price than at the higher price. Does this mean the price effect doesn't apply to the supply of computers? Explain. Briefly describe one or two factors that could cause the supply curve to shift as shown in the graph above