Supply and Demand

Each and every day we rely upon goods and services whose prices are influenced by supply and demand. The following articles discuss such products and their price changes. Access each of these articles and, using the questions provided, determine some of the factors which influence supply and some of the factors which influence demand.
  1. The article Consumers Chew on Soaring Beef Prices discusses recent increases in the price of beef.
    1. This article discusses several factors which have caused the price of beef to increase. What factors have caused the price of beef to increase? Which factor(s) affect supply and which factor(s) affect demand? Why? (i.e., What demand (PINTE) shifter is being changed or what supply (PENC) shifter is being changed?)

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    2. How have "high-protein diets" affected the demand for beef? Why? (i.e., What demand (PINTE) shifter is being changed?)

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    3. How do higher beef prices affect the prices restaurants charge? Why? (i.e., What demand (PINTE) shifter is being changed and/or what supply (PENC) shifter is being changed?)

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  2. The article Your Home: Bracing for Higher Rates discusses the relationship between mortgage interest rates and home prices.
    1. What is the relationship between mortgage loans and new homes? (Are they substitute goods? Are they complementary goods? Etc.)

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    2. What should happen to the demand for new homes if mortgage interest rates increase? Why? (i.e., What demand (PINTE) shifter is being changed and/or what supply (PENC) shifter is being changed?)

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    3. How do "better job prospects" affect the demand for new homes? Why? (i.e., What demand (PINTE) shifter is being changed?)

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  3. The author of the article Gas Could be Costly for Summer Motorists discusses current and future expected gasoline prices.
    1. Why is January typically "...one of the slowest driving months of the year?" How should this effect the price of gasoline in January? (i.e., What demand (PINTE) shifter is being changed and/or what supply (PENC) shifter is being changed?)

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    2. How does an increase in the price of crude usually affect the demand for or the supply of gasoline and the price of gasoline? (i.e., What demand (PINTE) shifter is being changed and/or what supply (PENC) shifter is being changed?)

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    3. The author says "We're starting to see the economy come back..." What does he mean by this? How and why will this impact the demand for or the supply of gasoline and the price of gasoline? (i.e., What demand (PINTE) shifter is being changed and/or what supply (PENC) shifter is being changed?)

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    4. How do "...fears about the nation's growing dependence on (crude oil) imports..." affect the demand for or the supply of gasoline and the price of gasoline? (i.e., What demand (PINTE) shifter is being changed and/or what supply (PENC) shifter is being changed?)

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Last updated February 7, 2005

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