Assignment:
SUPPLY AND DEMAND ARTICLE
INSTRUCTIONS
Find an article in a recent newspaper or magazine illustrating a change in price or quantity in some market; analyze the situation using economic reasoning. (See topic questions at the bottom of the page.) Be wary of commodity and financial markets unless you have a good understanding of the particular market. Markets for ordinary goods and services are most easily analyzed. Your article review should be no more than 1 typed page (double spaced, 12pnt font), with a graph of the Supply and Demand Model as noted below.
Reminder: Most changes (other than price) will only shift one curve-either supply or demand-not both. Price changes will not cause either curve to shift, but shifting either curve will change price. Equilibrium points are not fixed. They change when supply or demand changes. Prices will not necessarily return to their previous levels nor will quantities.
Reminder for the class of the fundamental relations:
1. Increases in demand cause price and quantity to increase.
2. Increases in supply cause price to decrease and quantity to increase.
3. Decreases in demand cause decreases in price and quantity.
4. Decreases in supply cause price increases and quantity decrease.
Article #1: Supply & Demand
A. Briefly summarize the article (2-5 sentences)
B. Identify the specific economic vocabulary/concepts that is used in the article, (identify at 3-5 vocabulary words or concepts)
C. Economic Analysis - Answer one of the following (if the article does not directly state what is happing in the market make an informed assumption, make sure your answer supports the facts stated in the article)
a. Has there been an increase or decrease in demand? Factors that could shift the demand curve include changes in preferences, changes in income, changes in the price of substitutes or complements, or changes in the number of consumers in the market. Explain what happened or is expected to happen in that market.
Or
b. Has there been an increase or decrease in supply? Factors that could shift the supply curve include changes in costs of materials, wages, changes in technology, or changes in the number of firms in the market. Explain what happened or is expected to happen in that market.
D. Draw a supply and demand graph to explain this change. Be sure to label your graph and clearly indicate which curve shifts. (Should match your explanation above!)
E. Turn in a copy of the article along with your explanation. (Be sure to include the date and source of the article if not printed on the copy.)
F. If you wish to do a summary on another topic please check with me for approval.