Section 1: Determinants of Supply

1. Section 1: Determinants of Supply Directions: On each of the supply graphs provided, move the supply curve to indicate the influence of these statements on the markeT For IPhones.

2. Section 1: The Market for smartphones • The first smartphone originated in 2006 and has consistently grown in popularity in the United States and globally. • This first section of this PPT will be based on the market for smartphones.

3. Effects of Rising Costs • Scenario:Computer chips, glass, plastics and other inputs to create smartphones increase in price. Price Place Picture Here S1 S2 Quantity Supplied

4. Effects of Rising Costs • Scenario:Apple sets up factories in China where they can pay a Chinese worker the equivalent of $1.78 and hour, versus an American worker an average of $25 and hour. Price Place Picture Here S1 S2 Quantity Supplied

5. Technology • Scenario:Apple invests in new capital goods (machines), which increase the speed at which the iPhone can be produced. Price Place Picture Here S1 S2 Quantity Supplied

6. Technology • Scenario:An earthquake destroys the Chinese factories and machines to produce smartphones are left unusable. Price Place Picture Here S1 S2 Quantity Supplied

7. Subsidies • Scenario:The government eliminates subsidy programs for smartphone firms. Price Place Picture Here S1 S2 Quantity Supplied

8. Subsidies • Scenario:The government pays Samsung a $1 billion a year subsidy in order to create incentives to continue to produce their smartphones. Price Place Picture Here S1 S2 Quantity Supplied

9. Taxes • Scenario:The government of the U.S. imposes a 30% excise tax on all foreign smartphone suppliers, which account for a large portion of the market. Price Place Picture Here S1 S2 Quantity Supplied

10. Taxes • Scenario:The government gives a tax credit ($100,000) to all U.S. smartphone makers or any domestic production of the smartphone. Price Place Picture Here S1 S2 Quantity Supplied

11. Regulation • Scenario:The government deregulates the smartphone market by allowing children under 16 to produce phones. Price Place Picture Here S1 S2 Quantity Supplied

12. Regulation • Scenario:The government regulates the smartphone market by making smartphone companies use a certain cleaning product that costs $30 per phone. Price Place Picture Here S1 S2 Quantity Supplied

13. Future Expectations of Price • Scenario:Smartphonesare a hot market, they are projected to sell for over $1000 on average in the next few years. Price Place Picture Here S1 S2 Quantity Supplied

14. Future Expectations of Price • Scenario:With the popularity of tablet computing, people are not willing to pay high prices on smartphones. Price Place Picture Here S1 S2 Quantity Supplied

15. Number of Sellers • Scenario:After the iPhone’s popularity, many companies such as Samsung, Google and Microsoft have entered the market. Price Place Picture Here S1 S2 Quantity Supplied

16. Number of Sellers • Scenario:Many companies are not able to compete with Apple for smartphones and exit the market for smartphones. Price Place Picture Here S1 S2 Quantity Supplied

17. Section 2: Supply and Demand Directions: On each of the demand/supply graphs provided, move the demand or supply curve to indicate the influence of these statements on the markeT. Indicate the effect on price and quantity.

18. The Market For Oil • Oil has become the lifeline for modern economies, providing products such as gasoline and plastics. For each of the following slides indicate the affect of the scenario on the supply and demand for oil products.

19. The Market for Oil • Show how an increase in the popularity of hybrid vehicles would affect the market for oil. • Move curve and arrow in the direction of the shift. Indicate the effect of price on and quantity. Price S Place Picture Here Pe Pe D D Qe Qe Quantity of Oil

20. The Market for Oil • Show how a global recession, which caused people to travel less, will would affect the market for oil (used to create gasoline). • Move curve and arrow in the direction of the shift. Indicate the effect of price on and quantity. Price S Place Picture Here Pe Pe D D Qe Qe Quantity of Oil

21. The Market for Oil • Show how a war in the Middle East, which causes oil producing countries to cut back on their production of oil, would affect the market. • Move curve and arrow in the direction of the shift. Indicate the effect of price on and quantity. Price S Place Picture Here Pe Pe D D Qe Qe Quantity of Oil

22. The Market for Oil • Show how U.S. congressional action that allows oil-drilling operations in previously untapped Alaskan preserves, would affect the market. • Move curve and arrow in the direction of the shift. Indicate the effect of price on and quantity. Price S Place Picture Here Pe Pe D D Qe Qe Quantity of Oil

23. Dieting • A new diet has become popular. This diet calls for lots of meat and vegetables, with little or no breads and fruits. Due to this diet, how would each of the following slides be affected?

24. Dieting • Show how the new diet would affect the market demand for meat. • Move curve and arrow in the direction of the shift. Indicate the effect of price on and quantity. Price S S Place Picture Here Pe Pe D D Qe Qe Quantity

25. Dieting • Show how the new diet would affect the market demand for bread. • Move curve and arrow in the direction of the shift. Indicate the effect of price on and quantity. Price S S Place Picture Here Pe Pe D D Qe Qe Quantity

26. Dieting • Show how the new diet would affect the market demand for fruits. • Move curve and arrow in the direction of the shift. Indicate the effect of price on and quantity. Price S S Place Picture Here Pe Pe D D Qe Qe Quantity

27. Dieting • Show how the new diet would affect the market demand for vegetables. • Move curve and arrow in the direction of the shift. Indicate the effect of price on and quantity. Price S S Place Picture Here Pe Pe D D Qe Qe Quantity