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Fulton Virtual Economics: Shifts Project

In this unit, you have learned about supply and demand, along with how both lines come together
to create an equilibrium in the marketplace. You have also learned how outside factors can cause
a line to shift.
Now, you will be using supply and demand graphs to describe the kinds of situations that could
lead to shifts in the lines. These are the kinds of shifts that change price and quantity in the
market, leading to changes we see in our everyday lives. We just want to use graphs to make it
clear ​why​ these kinds of changes happen!
Before we begin, let’s remember how shifts in supply and demand work. (For a more in-depth
review, see the optional Student Support video in your FVS Economics course: ​Supply, Demand,
Elasticity, and Equilibrium​.)
We begin with supply and demand lines that intersect at the equilibrium point. This tells us the
equilibrium price and quantity.

When ​price​ changes, we just look at the graph and trace over to see what the quantity demanded
and quantity supplied would be at that price. If the price we are considering is ​not​ the
equilibrium price, then we will see disequilibrium. If the price is too high, we will see a surplus.
If the price is too low, we will see a shortage. We can see all of that without ever shifting ​any
lines in the graph at all.
What if something other than price or quantity changes? What if we are looking at something
changing that is “outside the graph” (e.g. weather, people’s attitudes, the market for a related
product, etc.). If something changes demand or supply by changing the ​situation​, we must ​shift
one of the lines.
First, we determine which line must shift. Second, we must determine which direction it shifts.
The line will move to the right or left to a new position that is ​parallel​ to the original line. A shift
to the ​right​ is an ​increase​, while a shift to the ​left​ is a ​decrease​. (We don’t think of the lines
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shifting ​up​ or ​down​ because it can cause confusion when supply shifts. Always think of shifts as
moving to the ​left​ or ​right​.)
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For example, let’s say that we are looking at the market for snow sleds.
Example of a Shift (Snow Sleds Before a Snowstorm)

The ​demand​ for snow sleds

We start with the current
Something happens! increases​. That gives us a new
market for snow sleds. We
The weather report predicts demand line to the ​right​ of the
have the supply and demand
a huge snowstorm! People original line, along with a new
for snow sleds, which gives us
get excited about the equilibrium where the new
an equilibrium price and
possibility of sledding… demand line crosses the supply
quantity.
line that didn’t move.

We would say in this case that reports of a snowstorm caused an ​increase in demand​ for snow
sleds, which led to an ​increase in price and quantity​ for snow sleds.

In this project, you will be provided with graphs and descriptions for all four of the possible
shifts in supply and demand. You will then pick a product as an example and describe what type
of event might have caused the shift in the graph to happen.
For example, if you were given a graph that shows an increase in demand (like in the example
above), you might have said that this was a market for snow sleds when a snowstorm was
coming. (No, you can’t use that example as one of your answers. That would be giving one of
them away!)
(Hint: Be careful to make sure that you are addressing what could have ​caused​ the shift. Just
describing the shift itself​, no matter how accurate you are, isn’t actually answering what you are
being asked to do. To earn points, you must focus on what could have ​caused​ such a shift.)
Continue to the next page to get started!
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Scenario #1

An increase in demand has led to an increase in both price and quantity.

What product would you like to say this is for your example? ​Ball gowns
Describe a change in the “real world” that would cause this kind of shift to happen in the
market for the product you chose.
There is an average demand for ball gowns year round, however during prom season in
the spring (March and April), the demand increases and consequently the prices and
quantity also increase.

Go to the next page to continue to Scenario #2.

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Scenario #2

A decrease in demand has led to a decrease in both price and quantity.

What product would you like to say this is for your example? ​School supplies

Describe a change in the “real world” that would cause this kind of shift to happen in the
market for the product you chose.
During the summer there is a discount on school supplies because students are out of
school.

Go to the next page to continue to Scenario #3.

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Scenario #3

An increase in supply has led to a decrease in price and an increase in quantity.

What product would you like to say this is for your example? ​Winter coats

Describe a change in the “real world” that would cause this kind of shift to happen in the
market for the product you chose.
During the spring and summer, people do not typically buy winter clothes, so stores
discount the prices to get rid of their supplies.

Go to the next page to continue to Scenario #4.

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Scenario #4

A decrease in supply has led to an increase in price and a decrease in quantity.

What product would you like to say this is for your example? ​Electric cars

Describe a change in the “real world” that would cause this kind of shift to happen in the
market for the product you chose.
Electric cars are highly coveted because of their sustainability however expensive to
make so producers sell them for more.

Congratulations! You have completed all four scenarios. You are done with the project! If
you would like to see a rubric for the project, continue to the final page of this document.
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Rubric
Scenario Advanced (25) Proficient (19) Basic (13) Emerging (7)
Scenario #1 Description is Description is Description Description
clear and mostly clear and would cause a would cause a
Increase in accurately accurately shift in the same shift in the other
Demand describes a describes a line but not in line, not the
situation that situation that the direction required line.
would result in would result in required.
the scenario’s the scenario’s
shift. Error-free. shift. Only minor
errors (if any).
Scenario #2 Description is Description is Description Description
clear and mostly clear and would cause a would cause a
Decrease in accurately accurately shift in the same shift in the other
Demand describes a describes a line but not in line, not the
situation that situation that the direction required line.
would result in would result in required.
the scenario’s the scenario’s
shift. Error-free. shift. Only minor
errors (if any).
Scenario #3 Description is Description is Description Description
clear and mostly clear and would cause a would cause a
Increase in accurately accurately shift in the same shift in the other
Supply describes a describes a line but not in line, not the
situation that situation that the direction required line.
would result in would result in required.
the scenario’s the scenario’s
shift. Error-free. shift. Only minor
errors (if any).
Scenario #4 Description is Description is Description Description
clear and mostly clear and would cause a would cause a
Decrease in accurately accurately shift in the same shift in the other
Supply describes a describes a line but not in line, not the
situation that situation that the direction required line.
would result in would result in required.
the scenario’s the scenario’s
shift. Error-free. shift. Only minor
errors (if any).
Total Points Earned: _____/​100