Transcript Slide 1
Price (2000 dollars per barrel) 70 60 50 40 30 20 10 0 1969 1974 1979 1984 1989 1994 1999 Year 2004 Quantity (millions of barrels per day) 20 18 16 14 12 10 8 6 4 2 0 1969 1974 1979 1984 1989 1994 1999 Year 2004 A Supply Schedule for Apartments Price ($1000s) 100 99 98 97 96 95 94 93 92 91 90 Quantity of Apartments Supplied 10 9 8 7 6 5 4 3 2 1 0 A Demand Schedule for Apartments Price ($1000s) Quantity of Apartments Demanded 100 99 98 97 96 95 94 93 92 91 0 1 2 3 4 5 6 7 8 9 90 10 Combined Supply and Demand Schedules for Apartments Price ($1000s) Quantity of Apartments Supplied Quantity of Apartments Demanded 100 99 98 97 96 95 94 93 92 91 10 9 8 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9 90 0 10 Supply and Demand Schedules After an Increase in Supply (Only) Price ($1000s) Quantity of Apartments Supplied Quantity of Apartments Demanded 100 99 98 97 96 95 94 93 92 91 12 11 10 9 8 7 6 5 4 3 0 1 2 3 4 5 6 7 8 9 90 2 10 Supply and Demand Schedules After an Increase in Demand (Only) Price ($1000s) Quantity of Apartments Supplied Quantity of Apartments Demanded 100 99 98 97 96 95 94 93 92 91 10 9 8 7 6 5 4 3 2 1 4 5 6 7 8 9 10 11 12 13 90 0 14 Summary of the Effects of Shifts in Supply and Demand Effect on Equilibrium Price Effect on Equilibrium Quantity Increase in Supply fall rise Decrease in Supply rise fall Increase in Demand rise rise Decrease in Demand fall fall Distinguishing Three Forms of Insufficiency in Supply Scarcity Shortage Inadequacy Considered a Fundamental Characteristic of the World? Yes No No Always Disappears at Market Equilibrium? No Yes No Related to Basic Human Needs? No No Yes Price (2000 dollars per barrel) 1981 1973 2006 1979 1974 1978 1986 1996 1995 2001 Quantity Year Quantity (millions of barrels per day) Price 1981 2006 Price (2000 dollars per barrel) 1980 1979 1985 2004 1978 1996 1969 1986 1995 Quantity (millions of barrels per day) Per Capital Consumption of Oil (gallons per day) Price Quantity Supplied Quantity Demanded 17 9 3 16 7 4 15 5 5 14 3 6 13 1 7 12 -8 11 -9 S2 Price S1 P2 P1 D Q2 Q1 Quantity