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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