Macro-3
Running Head: UNIT II ESSAY
Unit II Macroeconomics Essay
Cecilia Williamson
Columbia Southern University
UNIT II ESSAY 2
The difference between a movement and a shift along the demand and supply curves depends
on factors that affect demand and supply. For instance, you get a movement on the demand and supply
curve when all the factors are constant except the price i.e., all the factors are constant, but the price
keeps changing (Hayashi et al., 2019). You get a shift on the demand and supply curve when more than
one factor affecting the demand and supply are changing. Thus, a change in price or any other factor will
cause the demand and supply curve to vary.
One of the main causes of the shift in the demand and supply curve is the increased prices, increasing
demand for a particular product while the quantity supplied remains constant. For instance, the supply
of Christmas trees is constant; however, when more people need it in a particular year than usual, the
processes will have to change. Changes in consumer preferences can cause a shift in the demand and
supply curve. For example, customers migrating to alternative products will affect the quantity and
pricing for the original product, hence causing the shift.
Equilibrium is related product demand and supply hence for one to find a product or market
equilibrium, one should consider supply and demand schedule, demand and supply curve and the
formula for demand and supply (Hayashi et al., 2019). The curves will help prove the point at which the
demand and supply meet and they are equal hence that is the equilibrium or the market equilibrium. To
find the equilibrium there should be no external forces which can influence the quantity and price.
Demand is a major driving factor in every economy hence it holds a significant i mpact on the
equilibrium. When the demand curve shifts to the right, there is an increase in demand leading to a
higher equilibrium price (Hayashi et al., 2019). If the supply curve shifts upwards, the equilibrium price
increases due to the decreasing quantity.
UNIT II ESSAY 3
Wristwatches remain popular amongst the audience despite having other alternatives such as
mobile phones to check the time. This can be explained by the fact that it is part of fashion, culture and
many other factors (Darmwal, 2015). One of the products currently experiencing a rise in supply and
demand is the smart watch. Despite the traditional watch still having a significant market share in the
wristwatch industry, the smart watch is bound to be the future as already indicated by the increasing
demand (Cecchinato et al., 2015). The changes can be explained by the demand and supply curves and
graphs.
The change in consumer taste and preferences is one of the factors currently affecting the
demand curve in wristwatch graph. The increased preference of smartwatch over the traditional
watches is currently pushing the graph to the right. The second factor is affordability i.e., the price
changes of a related good. The process of smartwatches is going down due to the increased supply and
many manufacturers. This has led to the demand shifting the curve to the right.
One of the main factors currently affecting the supply curve for wrist watches is the number of
sellers. According to Cecchinato et al. (2015), there are many sellers currently dealing in both traditional
and smart wrist watches leading to the increase in supply which leads to the supply curve shifting to the
right.
UNIT II ESSAY 4
References
Cecchinato, M. E., Cox, A. L., & Bird, J. (2015, April). Smartwatches: the good, the bad and the ugly? In
Proceedings of the 33rd Annual ACM Conference extended abstracts on human factors in computing
systems (pp. 2133-2138).
Darmwal, R. (2015). Wrist wars: Smart watches vs traditional watches. Telecom Business Review, 8(1),
69.
Hayashi, Y., Friedel, J. E., Foreman, A. M., & Wirth, O. (2019, March 18). A behavioral economic analysis
of demand for texting while driving. The Psychological Record, 69(2), 225–237.
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