A few things to remember with respect to demand & supply .....
Be sure you understand the difference between a "change in quantity demanded (supplied)" and a "change in demand (supply)". They are two very different concepts!
Know the factors that will shift the demand or supply curve --- memorize them if you have to.
Be able to determine the equilibrium values of price and quantity.
If the demand or supply curves shift, be able to determine the new equilibrium value of price and quantity.
Answer the following questions that relate to the (nonorganic) cotton market. Draw a graph for each question and show the change in either demand or supply given the scenarios below. Also, determine the change in the equilibrium price and quantity. Show this on your graphs as well.
1. Suppose workers in the cotton market receive a substantial wage increase.
2. People prefer more natural fibers such as cotton rather than synthetics.
3. The cotton crop is damaged by severe weather.
4. The price of wool, a good substitute for cotton, rises.
5. Because of pesticides, the growth of the (nonorganic) cotton crop increases dramatically.
6. There's a huge shift in production and consumption toward organic cotton clothing.
Draw nice, neat graphs. Answers to follow!
