Microeconomics · free preview
Shifts versus Movements along Curves
The good's own price slides you along a curve, any determinant change carries the whole curve to a new position, and reading which one happened is the core skill of market forecasting.
1. Two ways a curve can change
Two ways a curve can change
2. Tracing a shift through the market
Tracing a shift through the market
3. The classic confusions
The classic confusions
4. Why the distinction earns its precision
Why the distinction earns its precision
5. Classify the event
Frost destroys half the orange crop. Which of the following correctly describes the immediate effect in the orange juice market?
6. Reading the outcome backwards
Over a season, the price of hotel rooms in a resort town fell and the quantity of rooms rented also fell. Which story fits this pattern?
7. The new equilibrium price
A market has demand Q = 90 - P and supply Q = 2P. Then a rightward technology shift changes supply to Q = 2P + 30. Compute the new equilibrium price in dollars and write the number.
8. Tracing cheaper leather
The price of leather falls. What happens in the shoe market?
9. Both numbers fell
Over a season a resort town's hotel room price and the number of rooms rented both fell. Which explanation fits?
10. After the technology shift
A market has demand Q = 90 - P and supply Q = 2P, and a technology improvement shifts supply to Q = 2P + 15. Compute the new equilibrium quantity, and write the number.
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