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Eco 212 Week 2 Appendix a

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Appendix A

Answer the following questions.

1. If the price of a good increases, what happens to the quantity demanded? When Prices increase people tend to buy less.
2. If the price of a good decreases, what happens to the quantity supplied? When prices decrease then so does the supply because they don’t want people to buy at the lower cost.
3. Does a change in price create curve shifts? Explain. Honestly I’m not sure; I would think that if a price goes up then yes it would but if a price went down it wouldn’t.

Complete the following matrix. An example is provided.

|Event |Market affected by event |Shift in supply, demand, or |Change in equilibrium (P&Q) |
| | |both. Explain your answer. | |
|Frozen orange crops in California |Orange juice |Supply (left)—Not as many |Price will increase and |
| | |available oranges to offer |quantity will decrease. |
| | |consumers. | |
|Hurricanes in the Gulf Coast |Gulf Coast tourism |Demand (Left), less people will |Price will decrease and |
| | |be likely to travel to an area |quantity will go up, Because |
| | |that has been hit by a storm |they will lower the price to |
| | |that has caused damage. |try and get people to come |
| | |

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