02/26/2025 Shifters of Demand and Supply

Shifters of DEMAND
AND SUPPLY

Multiple Choice

Demand is defined as?

• a consumer's willingness and ability to buy goods and service in the market at a range of prices.

• a consumer's willingness and ability to sell goods and service in the market at a range of prices.

• a consumer's willingness to sell goods and service in the market at a range of prices.

• a consumer's willingness to buy goods and service in the market at a range of prices.

Multiple Choice

Which of these best describes the law of demand?

• if prices go up, quantity demanded will fall and if prices go down, quantity demanded will go up

• if prices go up, quantity demanded will also go up and if prices go down, quantity demanded will also go down

• there is no law of demand, each situation is unique and demand and prices cannot be predicted

• prices will go up for certain goods when quantity demanded goes up and vice versa

Multiple Choice

The law of supply says:

• A producer will supply less as prices of a good increase.

• A producer will supply more as prices of a good decrease

• A producer will supply more as a price of a good increases.

Multiple Choice

What happens if we go from point A on the graph to point B?

• an increase in quantity demanded

• a decrease in quantity demanded

• nothing

• an increase in demand

Multiple Choice

What happens to quantity demanded if the price of a good increases?

• quantity demanded increases

• quantity demanded decreases

• nothing

Define supply, demand, quantity supplied, and quantity demanded; graphically illustrate situations that would cause changes in each (Shifters/ determinants of demand and supply), and demonstrate how the equilibrium price of a product is determined by the interaction of supply and demand in the marketplace. (SS.912.E.1.4) (DOK 3)

​Our purpose is to identify:

• What is a shift? (Change in demand.)

• Why does it occur? (Peoples choices!)

• Factors (events - determinants) that Shift Demand

  • increase in demand - right

  • decrease in demand - left

CFE Content Limits for Demand and Supply:
6 Questions, 2 low complexity, 3 moderate complexity, and
1 highly complex

• Items may include knowing the definition of the law of demand and the law of supply

• Items may include being able to read supply and demand curves/schedules and how equilibrium is established.

• ** Items may include knowing what causes a demand and supply curve to shift either to the left or right

​The easiest way to remember the shifters of the Demand Curve

is to learn the acronym:

T.R.I.B.E.

​The letter T represents Tastes or Preferences!

An increase in demand is shown by a rightward shift of the demand curve.

This is because something is new, popular, trendy, or better than something else.

For example: Salads are healthier to eat than a greasy burger!

​What if the news reports that a major salad producer has shipped E Coli contaminated salads to Orlando, what will happen to the demand curve for salads?

A or B?

​A.

​B.

​What will happen to the demand curve for greasy burger?

A or B?

Multiple Choice

What if the news reports that grocery stores in Orlando have received E Coli contaminated salads, what will happen to the salad demand curve?

• Fig. 3.9

• Fig. 3.10

Multiple Choice

What will happen to the demand curve for greasy burger?

Fig. 4 or Fig. 5

• Fig. 4

• Fig. 5

​The R in T.R.I.B.E. relates to the price of complementary or substitute goods.

If the price of a complementary good decreases, demand increases shifting the curve to the right! (Primary good - Roses - Flowers) Complementary good - Vase - wrapping paper

​R: If the price of a complementary good increases, (Vase) the demand for roses shifts to the left. This is a decrease in demand!

​What will happen to the demand for candy when the demand for roses changes and candy is less expense?

A or B? (Substitute Good)

​A

​B

Multiple Choice

What will happen to the demand for candy when the demand for roses changes (due to an increase in the price of a complementary good) and buying candy is less expense?

• demand will shift right, increasing

• demand will shift left, decreasing

Multiple Choice

What happens to the demand for roses if the price of candy increases due to the increase in the price of cocoa? Candy is now $2 more a expensive.

• The demand curve for candy shifts right, increasing

• The demand curve for candy shifts left, increases

• The demand curve for roses shifts left, decreasing

• The demand for roses shifts right, increasing

​The I in T.R.I.B.E. represents the income of buyers. (consumers - demanders) If consumer income increases the demand curve shifts right showing in increase in demand.

​Original curve before consumer income increase!

​Increase (right shift) in demand after an increase in consumer income!

​This is true if the good is a normal (new) good!

​When consumer income decreases, (The I in T.R.I.B.E.) the demand curve shifts left showing a decrease in demand.

​Original curve before the decrease in consumer income!

​Leftward shift (decrease) in demand after a decrease in consumer income.

​This is true if the good is a normal (new) good!

​What happens to demand if (I) income increases and the good is an inferior (used or lower quality) good? *I.E. - Ground beef v. Steak

​The demand curve shifts left, decreasing!

​What happens to demand if (I) income decreases and the good is an inferior (used or lower quality) good? I.E. - Used car v. New Car

​The demand curve shifts right! increasing demand!

Multiple Choice

You best friend would typically buy you a birthday cake, however, their job just cut wages by a dollar (- $1.00) an hour this week (-$40.00). What will happen to the demand curve for birthday cakes?

• It will shift right, increasing demand

• It will not shift

• It will shift left, decreasing demand

• The price of cakes will increase

Multiple Choice

You go to work today and your boss tells you that you are getting an increase in your weekly income from $400 a week to $600. You are in the market for a new car that is priced at $10,000. The demand curve will shift which direction for new cars?

• The demand curve shifts right, increasing demand

• The demand curve shifts left, increasing demand

• The demand curve shifts left, decreasing demand

Small group practice

https://quizizz.com/admin/quiz/start_new/67a26981425fd9ecbc01f582

Please remember: ​

• All group/team members are responsible for participating and completing the assignment.

• The bottom line is that this is a team effort! No one is exempt from participation.

​On a typical weekend (Saturday and Sunday) a fast food restaurant will serve 384 meals. This weekend with a UCF basketball game the number of meals will increase to 1152. Why?

​The B in T.R.I.B.E. represents the number of buyers (consumers) in the market. If this population increases the demand curve shifts right (increase), if this population decreases, the demand curve shifts left.

Multiple Choice

UCF has two basketball games this weekend, they play on Saturday and Sunday.

What will happen to the demand for fast food in east Orlando this weekend?

• The demand curve will shift right, increasing

• The demand curve will shift right, decreasing

• The demand curve will shift left, decreasing

• The demand curve will shift left, increasing

​The E in T.R.I.B.E. represents future expectations by the consumer in regard to prices and the availability of goods and services in the market.

​If we (consumers):

Anticipate a price increase, we will demand more now! (right shift)

Anticipate a price decrease, we will buy less now! (left shift)

Anticipate a shortage of future goods, we buy more now! (right shift)

Anticipate more goods in the future, we buy less now! (left shift)

Multiple Choice

You anticipate a shortage of roses on Valentines Day, therefore, you decide to purchase roses on the Sunday before Valentines Day. This will cause the demand curve to?

• Shift right, increasing

• Shift left, increasing

• Shift right, decreasing

• Shift left, decrfeasing

Multiple Choice

You anticipate the price of Valentine Day candy to rise on the Saturday before Valentine's Day, therefore you buy your candy on Friday, what will happen to the demand for Valentine's day candy on Friday?

• It will shift right, decreasing

• It will shift right, increasing

• If will shift left, increasing

• It will shift left, decreasing

​Homework to be completed before tomorrow!

This is your (graded!) practice activity/ exit slip!

Go to This link: https://ocps.instructure.com/courses/2281841/assignments/35940104

Multiple Choice

A change in consumer tastes and preferences.

• Shift in Supply

• Shift in Demand

Multiple Choice

A change in consumer income.

• Shift in Supply

• Shift in Demand

Multiple Choice

A change in the number of consumers.

• Shift in Supply

• Shift in Demand

Multiple Choice

A change in the price of substitute goods.

• Shift in Supply

• Shift in Demand

Multiple Choice

A change in consumer expectations.

• Shift in Supply

• Shift in Demand

Multiple Choice

Oreo cookies are now extremely expensive to purchase. Instead of buying Oreo cookies, I now want to buy Chips Ahoy. What determinant of demand does this likely fall under?

• Change in Price of Complementary Good
• Change in Price of Substitute Good
• Change in Consumer Price Expectations
• Change in Number of Consumers in the Market

Multiple Choice

A change in the price of complimentary goods.

• Shift in Supply

• Shift in Demand

Multiple Choice

The government is giving every individual 18 and above an extra $1,000.00 this year. What determinant of demand does this likely fall under?

• Change in Consumer Tastes

• Change in Consumer Price Expectations

• Change in Number of Consumers in the Market

• Change in Consumer Income

Multiple Choice

McDonald's is having a special on their Big Mac purchases this week. Every Big Mac is $3 cheaper! When burger prices go down, this means you can buy more fries and a drink. What demand factor does this relate to?

• Change in Consumer Tastes
• Change in Price of Substitute Good
• Change in Price of Complementary Good
• Change in Number of Consumers in the Market

Multiple Choice

Porterville, California is now a major immigration center for Russians. Over 10,000 Russians are living in Porterville now! What demand does this determine?

• Change in Consumer Income
• Change in Consumer Tastes
• Change in Consumer Price Expectations
• Change in Number of Consumers in the Market

Multiple Choice

When the price of a product increases, a consumer is able to buy less of it. Which effect does this describe?

• Cost Effect

• Inflationary Effect

• Income Effect

• Substitution Effect

Multiple Choice

Which of these best describes the law of demand?

• if prices go up, quantity demanded will fall and if prices go down, quantity demanded will go up

• if prices go up, quantity demanded will also go up and if prices go down, quantity demanded will also go down

• there is no law of demand, each situation is unique and demand and prices cannot be predicted

• prices will go up for certain goods when quantity demanded goes up and vice versa

Multiple Choice

When the price of hot dogs decreases and the demand for hot dog buns increases, this explains the demand of

• Complementary goods

• Capital Goods

• Substitute Goods

• Consumer Goods

​Supply shifters / determinants:

R.O.T.T.E.N.

• R – resources; cost and availability.

• O – other goods prices; how much are other supplies charging?

• T – technology; if new technology makes the product/service cheaper to produce the supply will go up.

• T – taxes; if tax incentives are provided, supply will increase. If the taxes are higher, the supply will decrease and the curve shifts to the left.

• E – expectations of the supplier; a planned increase in the supply of roses right before Valentines Day.

• N – number of competitors. As more competitors enter the market, each supplier will supply less, the curve will shift to the left.

​ 02-15-2023

​The R in R.O.T.T.E.N. represent the price of resources the producer / supplier must purchase. What are those resources?

( Land, ?, Capital, ?)

If resource $ prices increase the supply curve shifts left, decreasing (v #)supply.

If resource $ prices decrease, the supply curve shifts right, increasing (^ #) supply.

​The O in R.O.T.T.E.N. represents the prices of other goods that could be produced and sold using the resources available.

• For example: If I produce cookies and cupcakes and the price of cupcakes in the market is rising, then I will bake cupcakes and not cookies.

• The supplier will always try to sell the product with the highest price!

​The T in R.O.T.T.E.N. represents the technology available or used in production.

Improved, more efficient, advanced technology will shift the supply curve right, increasing supply.

A decline or technology failure will shift the supply curve to the left, decreasing.

​The second T in R.O.T.T.E.N. represents taxes and/or subsidies.

If the government reduces taxes on resources, then the supply curve will shift right, increasing!

​If the government increases subsidies the supply curve will shift right, increasing!

​

If the government decreases subsidies the supply curve will shift left, decreasing.

​

If the government increases taxes, the supply curve will shift left, decreasing!

​The E in R.O.T.T.E.N. represents the expectations of the producer/supplier in regard to the prices and availability of resources. This may also relate to the possibility of prices increasing or decreasing in the market for goods.

​If the producer anticipates that resource prices may go up in the future they will supply more now, shifting the supply curve to the right, increasing.

​If the supplier anticipates that prices in the goods and services / product market will increase in the future, they will produce less now, shifting the supply curve to the left, decreasing supply.

​The N in R.O.T.T.E.N. represents the number of (quantity) of suppliers in the market.

​

If the market shows that prices are increasing, the number of suppliers will increase shifting the supply curve right, increasing.

​

If the market shows that prices are decreasing, the number of suppliers will increase shifting the supply curve left, decreasing.