I understand all of the questions and answered them, but I am so lost on how to graphically illustrate them? I tried but my teacher told me I was wrong and that each graph should have 3 curves on each graph? Download Attachment: 2.05APMICRO.docx Additi

1. Normally, whenever a new video game console comes out, there is a shortage all over the United States. Graphically illustrate and fully explain where the shortage comes from, how the various roles of prices can come together to end the shortage, and why the final outcome is not necessarily the fairest outcome.

1. a. When the new video game console is released, there is an excess amount of demand and a limited amount of supply, and this is where the shortages come from. At first, the price will remain constant for a while until the demand lessens. Due to this, distributors now have a high amount of supply, and to get rid of this excess amount, they have to make a price cut so consumers will buy the product. This final outcome is not necessarily the fairest outcome because all of the suppliers were able to sell a lot of the product, while the distributers had a surplus amount and had to cut the prices in order to get rid of it; the distributers were at a disadvantage.

1. b. See graph.

2. In the winter of 2006–2007, unusually cold weather prevented people from enjoying the great outdoors. This led to a huge surplus of snowmobiles all over Minnesota. Fully explain how the surplus came about, how the "invisible hand" dealt with this surplus and provide a graph to illustrate your explanation.

2. a. The surplus of snowmobiles all over Minnesota came about because of the expectations the producers had of the demand for them. It was cold weather that was “unusual” and not expected. Ergo, they expected for consumers to still want snowmobiles at the same rate; the demand would remain the same. So because the weather was unexpected making for a prevention of people from enjoying the great outdoors, less people bought snowmobiles. Furthermore, because people did not need snowmobiles, there was a surplus amount of products that were not being purchased. Basically, the demand was less than the supply. Also, the “invisible hand” will cause for the price of snowmobiles to decrease till it reaches the point of equilibrium.

2. b. See graph.

3. Draw a graph illustrating what would happen in the market for log cabins if consumer income increased by 19% in Montana.

See graph.

4. Draw a graph showing what would happen in the market for cat food if it were discovered that many brands of canned cat food, contained poison.

See graph.