Micro proj 1 - Mandatory project, professor luea PDF

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Mandatory project, professor luea...

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ECON1020: Principles of Microeconomics

Instructor: Prof. Luea

Project 1 Demand in the Real World Article citation: Zarroli, Jim. “As Hurricane Irma Nears, Gasoline Is in Short Supply for Floridians.” Nashville Public Radio . 8 September 2017. Web. Summary: In his article, “As Hurricane Irma Nears, Gasoline Is in Short Supply for Floridians”, Zarroli details how Hurricane Irma is “coming fast on the heels of Hurricane Harvey” and suggests that residents of Florida evacuate before the hurricane hits. And so, due to all of the panic and uncertainty about the hurricane, residents have been swarming gas stations in order to prepare. Some residents have had to wait hours upon hours for gas. Zarroli suggests that this is just the beginning of the chaos. Market Response: Consumer Tastes and Preferences In hearing of the danger and immensity of hurricane Irma, consumers will increase their demand for gasoline as many plan to evacuate and also in general prepare for what is to come. Additionally, because consumers have realized that the demand for gasoline has already begun to increase, it will only continue to increase as it is a fairly necessary resource that consumers are willing to compete for. Diagram Explanation: The initial price level is denoted as P0 in the diagram below, and the initial quantity demand is Q0. If consumer’s  preferences for gasoline increases, the demand is illustrated by the rightward shift of the demand curve from D to D’. The new level of quantity demand (all things else being held constant) is Q1 ....