Supply and Demand Curves:

For each scenario, determine the following tasks (in order):

1. Draw an original market equilibrium that describes the state of the market before the given scenario occurs. Clearly label both axis, label each a single supply curve and a single demand curve, and label the original equilibrium.
2. Does the scenario cause a shift in the demand and/or supply curve? If so, which curve, which direction? Describe.
3. Draw the shift(s) in the supply and/or demand curve as you described for the previous prompt.
4. Label the new equilibrium price and quantity.
5. Describe what is the impact of the scenario on the equilibrium price and equilibrium quantity

Scenarios

These are the six scenarios. You will determine each of the five tasks above for each scenario.

1. Gasoline prices rose globally and in the United States in 2008. Describe and illustrate the impact on the market for compact fuel-efficient cars, such as the Toyota Prius.
2. Suppose a hurricane causes damage to homes and buildings throughout a city such that most buildings require repair before they are fully functional again. Describe and illustrate the impact on the market for construction services.
3. Suppose a hurricane causes damage to agricultural production in the U.S. Southeast. Describe and illustrate the impact on the market for agricultural products.
4. The COVID-19 pandemic caused a disruption of the production of manufactured goods throughout the world, including the production of bicycle frames and components. At the same time, while people worked from home and attended school from home, had limited social interaction, and had limited opportunities for fitness, more people desired to take up bicycling as a hobby. What is the impact on the market for bicycles?
5. Walmart sells a number of inferior goods, such as inexpensive off-brand clothing, off-brand food, etc. The 2009 recession was accompanied by decreases in income for people across the country. What is the impact on the market for inferior goods at Walmart? What is the impact on Walmart's total revenue earned from inferior goods?
6. Straw used for farm animal feed is an agricultural by-product of producing cereal plants such as grain. It comes from the dry stalks after the grain and chaff have been removed. Suppose higher global demand for grain leads to higher international prices for grain. Describe and illustrate the impact on the market for straw.