Economics 12
Summary of Activity:
Using a white piece of paper for each record a graph of supply increasing, supply decreasing, demand
increasing, and demand decreasing against the original graph of demand and supply. After each I want you to
describe a scenario that could happen that would relate to each graph. Also, include the shortage or surplus
(the dollar amount and show this on the graph) the company would face if it continued to offer their products
for the original equilibrium price.
Label the old and new equilibrium points.
Give suggestions for the company to get to the new equilibrium point (how to recover from their shortage or
surplus).
Steps to Completing Activity:
Step 1: Create a table similar to the one below (using your own numbers) on loose-leaf. Fold a legal sheet of
white paper in half so you have two square like shapes. On the front put the following headings (one for each
square) “Demand Increase and Demand Decrease”, and put the following headings on the squares on the back
of the sheet “Supply Increase and Supply Decrease”.
Step 2: Draw the original resulting demand and supply graphs based on this table (the one created in step 1)
under each of the four scenarios (demand increase, demand decrease, supply increase and supply decrease)
using price along the Y axis and Quantity along the X axis.
Step 3: Using the power point information create scenarios for each of the headings (demand increase,
demand decrease, supply increase and supply decrease).
Step 4: Sketch the resulting line based on your scenario. List the old and new equilibrium points, and if there
would be a shortage or surplus if they continued to sell at old equilibrium price.
Step 5: After each scenario include the following (and label them A,B,C):
A. Identify the factors that influence people’s choices and decisions to buy this particular product.
B. Describe the decision making process based on preferences, from a consumers perspective.
C. If the company continues to sell at the old equilibrium price (it would result in a shortage or surplus).
Offer two ways they could fix this.
Rubric
NAME:__________________________________________
Self-Assessment
Yes/No (list what you did
Criteria(10pt.each)
wrong and why you didn’t
understand it the first time)
Are my graphs correct based
on the shift (increase and
decrease) in supply or
demand?
Are my shortages and
surpluses recorded
correctly?
1st mark:
What I can do to improve
Final mark:
Have I explained what a
shortage or surplus is and
how it is related to the graph
it is referring to?
Do my scenarios fit with the
graphs they are explaining?
Did I identify the factors
that influence people’s
choices and decisions to
buy this particular
product?
Did I describe the decision
making process based on
preferences, from a
consumers perspective?
Did I offer two ways the
company could fix their
shortage or surplus?
Have you labeled the axis, the old
graph lines and the new (ex. S0 and
S1) used the same increments (ex. go
up by 5), title, labeled the old and
new equilibrium price, labeled the
three quantities (old and new
equilibrium, and shortage or surplus
quantity) and explained all in your
descriptive scenario?