Question

On a graphing paper, illustrate the shortage or surplus of demand or supply using the following data to complete the table below. Price o Shortage/Surplus Exercise 3 • Determine whether the curve will shift to the right or to the left. Write A on the line before each number if it shifts to the right and B if it shifts to the left. I. Demand 1. Increase in population 2. Decrease in income 3. Increase in income 4. Increase in taste 5. Decrease in population II. Supply Increase in size of population 2. Increase in technology 3. Decrease in cost of production 4. Typhoon hit the rice lands 5. Decrease in technology Exercise 4 Write the letter of the phrase (column B) that best describes the terms (column A) below. B 1. Price system a. Technological development 2. Non-price determinant of demand b. Movement in the demand curve 3. Non-price determinant of supply c. Movement in the supply curve 4. Rightward shift of demand curve d . Demand = Supply

Answer 1

Answer 2.

Price Shortage/Surplius

2 - Shortage

4 - Shortage

6 - No shortage, no surplus

8 - Surplus

10- Surplus

12- Surplus

14- Surplus

Reason- Shortage occurs when Qd> Qs

Surplus occurs when Qs>Qd

When Qs=Qd there is no shortage no surplus

Answer 3.

I. Demand

1. A

2.B

3. A

4. A

5. B

Reason- When population, income and taste increases demand increases and vice versa. Right shift of demand curve means more demand and left shift of demand curve means less demand.

II. Supply

1. A

2. A

3.A

4.B

5.B

Reason- Supply increases/ shifts right when population increases, technology improves or cost of production falls. During natural disasters resources reduces and so does supply.

Note-According to HOMEWORKLIB RULES first question is answered.