Question

supply & demand determinants
supply determinants

1. number of sellers changes
2. technology changes
3. costs of production change
4. opportunities in other markets change
5. natural events occur
6. expectations of price changes

demand determinant

1. people enter or leave market
2. preferences/trend change
3. incomes rise or fall
4. substitute good changes in price
5. complementary good changes in price
6. expectations of a future change in income or price

suppliers practice

1. an increase in the price of hay would cause the supply of beef to (increase or decrease).

which determinant causes this change?
which way will the curve shift? (left/right) draw the new supply curve

1. the government lowers taxes on cattle ranchers so the supply of beef will (increase or decrease).

which determinant causes this change?
which way will the curve shift? (left/right) draw the new supply curve

1. mattel expects the new barbie to be the “it” toy at christmas; the supply of barbies will (increase or decrease).

which determinant causes this change?
which way will the curve shift? (left/right) draw the new supply curve

1. the peanut butter manufacturers are all buying new equipment that can make peanut butter 2 times faster than before; the supply of peanut butter will (increase or decrease).

which determinant causes this change?
which way will the curve shift? (left/right) draw the new supply curve

1. there was a massive forest fire that ravaged the pine belt; the supply of new homes will (increase or decrease).

which determinant causes this change?
which way will the curve shift? (left/right) draw the new supply curve

Explanation:

Question 1

Step1: Analyze hay price impact

Hay is an input for beef production. Higher hay price increases production costs.

Step2: Determine supply change

Increased costs decrease supply (producers supply less at each price).

Step3: Identify determinant

Costs of production change (determinant 9).

Step4: Curve shift direction

Left shift (decrease in supply shifts curve left).

Step1: Analyze tax reduction impact

Lower taxes reduce production costs for cattle ranchers.

Step2: Determine supply change

Lower costs increase supply (producers supply more at each price).

Step3: Identify determinant

Costs of production change (taxes are part of production costs).

Step4: Curve shift direction

Right shift (increase in supply shifts curve right).

Step1: Analyze price expectations

Mattel expects high demand (Christmas "IT" toy), so they'll produce more now.

Step2: Determine supply change

Expectations of price changes (future demand) lead to increased current supply.

Step3: Identify determinant

Expectations of price changes (determinant 12).

Step4: Curve shift direction

Right shift (increase in supply shifts curve right).

Answer:

• Supply of beef: Decrease
• Determinant: Costs of production change
• Curve shift: Left

Question 2