Q DEMAND IN-CLASS WORKSHEET 1 This question examines the market for smart watches. You will construct a demand curve from a demand schedule and explore the relationship between the price of a new smart watch and the quantity of smart watches demanded by consumers. The relationship between the price of a new smart watch and the quantity demanded is provided by the demand schedule below. Price (dollars per smart watch) Quantity Demanded (in thousands) $500 0 400 20 300 40 200 60 100 80 Task 1: In the space below, plot each of the five points provided in the demand schedule and sketch out the demand curve for smart watches. Remember to place “Quantity Demanded (in thousands)” on the horizontal axis and “Price (dollars per smart watch)” on the vertical axis. Hint: This demand curve is a straight line. Task 2: What is the quantity of smart watches demanded when the market price is $300 per smart watch? Task 3: What is the quantity of smart watches demanded when the market price is $250 per smart watch? DEMAND IN-CLASS WORKSHEET 2 This question examines the market for slices of pizza. You will construct a demand curve from a demand schedule and explore the relationship between the price of a slice of pizza, the price of a burrito (a substitute good), and the quantity of pizza slices demanded by consumers. The relationship between the price of a slice of pizza, the price of a burrito (a substitute good), and the quantity of pizza slices demanded is provided by the demand schedule below. Price (dollars) Quantity of Pizza Slices Demanded (when the price of a burrito is $5.00) Quantity of Pizza Slices Demanded (when the price of a burrito is $7.00) $12.00 10 20 10.00 20 30 8.00 30 40 6.00 40 50 4.00 50 60 Task 1: In the space below, in black ink, sketch out the demand curve for slices of pizza when the price of a burrito is $5.00. Remember to place “Quantity of Pizza Slices Demanded” on the horizontal axis and “Price (dollars)” on the vertical axis. Hint: This demand curve is a straight line. Task 2: In the space above, in blue ink, sketch out the demand curve for slices of pizza when the price of a burrito is $7.00. Hint: This demand curve is a straight line. Task 3: When the price of a substitute, like burritos, increases, does the demand for the good in question shift to the right or the left? SUPPLY IN-CLASS WORKSHEET 2 This question examines the market for slices of pizza. You will construct a supply curve from a supply schedule and explore the relationship between the price of a slice of pizza, the quantity of pizza slices supplied by producers, and the cost of an input good. The relationship between the price of a slice of pizza and the quantity demanded is provided by the demand schedule below. Initially, the cost of the cheese used to make pizza is $7.50 per pound. Price (dollars) Quantity of Pizza Slices Supplied (when the price of cheese is $7.50) Quantity of Pizza Slices Supplied (when the price of cheese is $9.00) $12.00 45 10.00 40 8.00 35 6.00 30 4.00 25 Task 1: In the space below, in black ink, plot each of the five points provided in the supply schedule and sketch out the supply curve for slices of pizza. Remember to place “Quantity of Pizza Slices Supplied” on the horizontal axis and “Price (dollars)” on the vertical axis. Hint: This supply curve is a straight line. Task 2: Suppose that the price of cheese increases to $9.00, and that pizza shops are willing to supply 5 less pizzas at each price point. Complete the third column in the table above. Task 3: In the graph above, in blue ink, sketch out the supply curve for slices of pizza when the price of cheese is $9.00. Hint: This supply curve is a straight line. SUPPLY IN-CLASS WORKSHEET 3 This question examines the market for milkshakes. You will analyze the effects of different supply shifters on the supply curve for milkshakes. Task 1: The price of ice cream, used to produce milkshakes, falls in price. Does the supply curve for milkshakes shift? If so, does it shift to the right or to the left? Task 2: The wages paid to milkshake makers increases. Does the supply curve for milkshakes shift? If so, does it shift to the right or to the left? Task 3: Milkshake producers expect the price of milkshakes to rise in the future. Does the current supply curve for milkshakes shift? If so, does it shift to the right or to the left? Task 4: Milkshake producers can also make smoothies (instead of milkshakes). When the price of smoothies falls, does the supply curve for milkshakes shift? If so, does it shift to the right or to the left? Task 5: During the summer months, consumers want to purchase more milkshakes. Does the supply curve for milkshakes shift during the summer months? If so, does it shift to the right or to the left?