Economic

Journal #2 Supply and Demand Event Journal 10 points

This exercise is an informal analysis of a real world economic event. You will practice providing an economic

explanation of what is happening in the market (supply and demand for one product, like apples, for example) that

you have chosen. You may feel a bit uncertain about your analysis because you will likely not have all of the

information to be precise, but just do your best. Along with a sketched graph, you will use words to explain a real

world event (basically a supply or demand shifter) and what you think the resulting economic outcome (new

equilibrium price and quantity) will be. Your answer should be a graph and at least a half of a page of written

explanation. You can type it if you want or you can do it by hand if you are neat. If I can’t read it you will lose

points. Be sure to follow the directions. I look for the items I ask for when assigning points.

a. Find a news source for some event that would be a demand shifter or a supply shifter in a market for a good.

(Some good news sources might be agweb.com, Startribune.com, Reuters.com, wsj.com, or some other

publication that would give you real news.) If you don’t remember what these shifters are, look in the slides or

in your text in Tables 1 and 2 for some ideas. Be sure to put a link to your article in your finished journal

assignment.

b. Once you have found an event to use, sketch the market for the product you are studying. Be sure to include a

demand curve, a supply curve and label the price axis and the quantity axis. (You won’t have data for this, so

just a sketch is fine.) Be sure to the include units used to measure the good being modeled. See if you can find

a current price for your product (try google – or there might even be information in your article) and the

amount produced in the market you are studying (again, google is helpful.) These might have to be guesses if

you can’t find price information, but try to find something. Be sure to indicate where you got your information

– have some kind of citation. It doesn’t have to be formal. (Even if it is a guess, report that.)

c. Next draw the event in your market (i.e. a demand shift or a supply shift) Explain the event in words (like an

“increase in the supply of … and a decrease in the quantity demanded”) Finally, be sure to identify the market

outcome (explain what happens to the market equilibrium price and quantity) that you think will result from

your event.