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ECO/561

Discussion Questions Week One What kinds of changes in underlying conditions can cause the supply and demand curves to shift? Give examples and explain the direction in which the curves shift. Particular determinants of supply or “shifts in supply� can be related to the following modifications: 1. Resource prices. Increased resource prices of iron ore as well as coke boost the cost of manufacturing steel, contract earnings, and decrease supply. The supply curve will move towards the left. Lower resource rates of sand, gravel and limestone decrease the cost of manufacture of concrete, increase earnings, as well as boost concrete supply. The supply curve will move towards the right. 2. Technology. For instance, more efficient GPS technology boosts the supply of GPS tools. The supply curve will move towards the right.

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Eco 561 week 1 dq 1