Economics
Unit 2: Supply & Demand
Name: _________________________
Period: _________
Equilibrium Price
Scenarios
1. Soybeans currently sell at a price of $3/lb. The New England Journal of Medicine recently published an
article concerning the cardiovascular benefits of eating soy in ever meal. Show how this will affect the
price of soybeans.
2. Katie currently sells handmade sweaters and scarves at a local shop. Due to drastic famine in Ireland,
many sheep have perished, resulting in higher wool prices. Thus, now Katie must charge more…why?
Show how this price increase happened. (Agg. Demand stays constant)
3. Lenny owns a contracting and construction company. The federal government has mandated a minimum
wage increase of $2 (from $5 to $7). What will happen to the hourly rate he charges clients? (Agg.
Demand stays constant)
4. The Farmers Almanac predicted a devastating winter for this year; but, we haven’t seen much snow—
until now! With both of these factors in mind, what might happen to the price of snow shovels on the eve
of a large storm? (Agg. Supply remains constant)
5. A new study has been released proving the inefficiency of hybrid vehicles. However, 2 months ago, the
amount of dealers offering various hybrid models nearly tripled. How will this affect the price of hybrid
vehicles? (Agg. supply stays constant)