Name: Date: 1. Whether the shock affects demand or supply? 2. Whether it is a positive shock (expand) or negative shock (contract)? 3. What is the new equilibrium price (p*) and equlibrium quantity (q")? Identify whether a shock affects demand or supply. Identify whether a shock is positive or negative. Identify the new equilibrium price and quantity. Problem Increase Change in Demand Change in Supply Change in Equilibram Price Change in Equilibrium Quantity CETERIS PARIBUS, all else equal 1 Number of buyers (e.g. Institutional buyers, Bitcoin) Graph 1 Increase in Demand 2 Income 3 Price of complement (Peanut Butter & Jelly; Right shoe and a left shoe) 4 Price of substitute (Mcdonalds & Burger King) 5 Tastes (Bitcoin) 6 Expectations of Higher Future Prices (House prices) + 1 Input prices (raw materials, labor, oil) 2 Technology 3 Number of sellers 4 Expectations of Higher Future Prices 5 Natural disasters (e.g. hurricane, pandemic) Basic necessities Luxury goods (e.g. strawberries, jewelry)