Supply and demand are powerful forces in a free market. In four to five sentences, explain some of the factors that cause shifts in supply and demand and what the effects of these shifts are.

For each of the following changes in the demand or supply curves in the automobile market below, draw a graph showing the old demand and supply curves as well as the new demand or supply curve (whichever shifts). Also show how the equilibrium price and equilibrium quantity change. Show work on 3 different graphs. With lower trade barriers, foreign automakers export more cars to the U.S. U.S. automobile workers unionize. Due to research and development (R&D), new technologies enable automakers to produce cars much faster.

Using supply and demand diagrams show the effects on equilibrium price and quantity for the following situations. Begin at an initial equilibrium and show the effects on the demand or supply curves, as well as the effect on equilibrium price and quantity. (You can just draw them by hand and upload the picture.) The impact of a drought in the Midwest on the market for wheat. The impact of a fall in the price of steel on the market for new cars. The impact of a study showing orange juice consumption lowers the risk of heart attacks on the market for orange juice, and on the market for cranberry juice. The impact of an increase in the price of hot dogs on the market for hot dog buns.

In the graph below start in equilibrium, show an increase in supply. What happens to equilibrium price?   What happens to equilibrium quantity?  Make sure you label the axis, the curves and original price and quantity and the new price and quantity.