Prepared by Meng' Enjoy it

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• Prepared by Meng. Enjoy it!!

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Cases Study Demand and Supply
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• Case 1 Computer Sales Booming Dell Still 1
• October 19, 2005 from www.consumeraffairs.com

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• Gartner, Inc., an industry analyst, reports
  Worldwide PC shipments totaled 55 million units
  in the third quarter of 2005, a 17.2 percent
  increase from the third quarter of 2004.
• "Strong market growth continued to be driven by
  lower prices and mobility in the third quarter,"
  said Charles Smulders, vice president of
  Gartner's Computing Platforms Worldwide Group.
  "These factors sped up new PC adoption and
  replacement activities. Overall market growth
  exceeded expectations, with home demand for
  mobile being particularly strong."

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• Computer Market
• Move along demand curve-increase in quantity
  demanded
• Move along supply curve-decrease in quantity
  supplied
• Equilibrium doesnt change.

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• Case 2 Mad Cow Scare in Japan (2001)
• The Australian11/22/01

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• Japanese Shun Beef and US Food Imports After
  Second Mad Cow Case Confirmed
• JAPAN yesterday admitted finding a second case of
  mad cow disease, a discovery which threatens to
  cripple the domestic beef market and to increase
  the damage already suffered by beef exporters to
  Japan, including Australia.
• The Health Ministry last night confirmed a cow on
  Japan's north island of Hokkaido had tested
  positive for the brain-wasting disease bovine
  spongiform encephalopathy (BSE) during nationwide
  testing for the disease, a program introduced
  after the discovery on September 10 of Asia's
  first confirmed BSE case in a cow on a farm near
  Tokyo.
• Japanese beef consumption has plummeted by 70 per
  cent since then, despite the now government
  assurance on October 18 that domestic beef was
  BSE-free and safe. Scientists have linked the
  human consumption of BSE-infected beef to a fatal
  brain disease known as variant Creutzfeldt-Jakob
  Disease (vCJD), with about 100 Britons succumbing
  to the disease after eating contaminated beef.

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• Beef Market
• Demand decrease-systematical inward shift.
• Equilibrium changes-equilibrium price decreases
  equilibrium quantity decreases.

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• Case 3 HIGH GAS PRICES CHANGING AUTO MARKET
• Monday, September 26, 2005 from
• www. foxnews.com

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• Many executives have long said buying habits
  would not change until gas hit 3 a gallon.
  However, with prices hovering near that point and
  expected to spike again after Hurricane Rita
  (search), SUV sales are down 7.3 percent this
  year.
• Gasoline prices reached a high of 3.06 on
  September 5 and were recently at 2.75, according
  to AAA.
• "Every time gas prices go up another 20 cents,
  you know you see some people making a decision
  based on that," said Paul Taylor, chief economist
  for National Automobile Dealers Association.
• General Motors Corp. (GM) in late August
  acknowledged it was worried about high gas
  prices, saying it was not expecting the same
  growth in the large SUV segment that the industry
  has seen in the past.

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• SUV market
• Demand decrease-systematical inward shift.
• Equilibrium changes-equilibrium price decreases
  equilibrium quantity decreases.

• Gas market
• Move along demand curve-decrease in quantity
  demanded
• Move along supply curve-increase in quantity
  supplied
• Equilibrium doesnt change.

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• Case 4 House Price Trends The Impact on
  Apartments and the Economy
• Made by Meng

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• Cohen provides forecast scenarios for
  appreciation over the next five years and
  examines their impact on the apartment market.
  Demand for apartments improves rapidly if house
  prices increase and capital will continue to
  flow into the apartment market.

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• Apartment market
• Demand increase-systematical outward shift.
• Equilibrium changes-equilibrium price increases
  equilibrium quantity increases.

• House market
• Move along demand curve-decrease in quantity
  demanded
• Move along supply curve-increase in quantity
  supplied
• Equilibrium doesnt change.

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• Q1 In the summer of 2006, there is huge increase
  in the price of gas, if you still remember, how
  will this affect the markets for gasoline and new
  car sales.
• Increase in quantity demanded for gas, decrease
  in quantity demanded for new cars.
• Decrease in quantity demanded for gas, decrease
  in demand for new cars.
• Increase in demand for gas, increase in quantity
  demanded for new cars.
• Decrease in demand for gas, increase in demand
  for new cars.

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• Case 5
• ----American Postwar Income Increase

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• Urban mass transit and railroad transportation
  used to be popular before. However, the usage of
  both of these modes of travel declined so
  dramatically as postwar incomes were rising and
  more people could afford automobiles.
• During the same period as postwar income
  increased, Americans have become more concerned
  about the environment quality.

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• Inferior Goods (eg.Mass Transit) market
• Demand decrease-systematical intward shift.
• Equilibrium changes-equilibrium price increases
  equilibrium quantity increases.

• Normal Goods (Environment) market
• Demand increase-systematical outward shift.
• Equilibrium changes-equilibrium price decreases
  equilibrium quantity decreases.

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• Case 6 Revolutionary Technology Could
  Significantly Increase Heavy Oil Production
• Release Date August 15, 2005 from
  www.netl.dov.gov

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• WASHINGTON, D.C. A revolutionary new DOE-funded
  oil production technology that promises lower
  costs, reduced environmental and safety risks,
  and increased production is being commercialized
  by research partner Completion Concepts Inc.,
  Katy, TX.

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• Oil Market
• Supply increase-systematical outward shift.
• Equilibrium changes-equilibrium price decreases
  equilibrium quantity increases.

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• Case 7 Water Market
• October 5, 2006 from Mengs imagination

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• Recently, scientists found that the quality of
  drinking water in the state of Misonneta is under
  standard requirements. So the government enforces
  water management companies to engage in water
  cleaning process. This process comes at a huge
  cost for those companies. They have to replace
  their out of date water purifying equipments and
  hire more labors to operate the new technologies.

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• Water Market
• Supply decrease-systematical inward shift.
• Equilibrium changes-equilibrium price increases
  equilibrium quantity decreases.

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• Q2 If income decreases, say, you lost your job,
  what will happen with equilibrium price and
  quantity for the market of unsafe, small and low
  quality apartment?
• Equilibrium price will decrease, equilibrium
  quantity will decrease.
• Equilibrium price will decrease, equilibrium
  quantity will increase.
• Equilibrium price will increase, equilibrium
  quantity will decrease.
• Equilibrium price will increase, equilibrium
  quantity will increase.

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• Good luck with your first Midterm exam!