In many large cities you can now use your cell phone to call Uber or Lyft instead of hailing a taxi. Would you expect this to affect the prices of taxi medallions (that is really the supply of taxis)? Why or why not? Talk about supply and demand curves in your answer. Make sure you can draw them!
The price or supply of taxis would be affected due to the new option for Uber or Lyft. Income and prices of related goods all shift the demand curve. The demand for taxis would go down because of the new completion of Uber or Lyft. This shifts the demand to the left which would also effectively shift the price lower.
Can you think of an example where you watched the supply of a good or service change rapidly? (For example, a new hotel or restaurant opened.) Based on the chapter what would you expect to see happen? Why?
A new sister timeshare resort opened not too long ago. The new timeshare resort is more modern, different location, and newer. Many of the owners of the older timeshare decided to trade in for the newer timeshare. Based on this chapter, I would expect an increase in the supply of the units also increasing the cost.
Give another example of a concept from this chapter. For example I used AirBnB to rent an apartment in San Francisco a few years ago. How did AirBnB affect the supply of short term room rentals in San Francisco? How about the supply of long term rentals?
In resort communities there is a shortage of long term housing available to the people that live and work here. Due to the shortage, or excess demand, there are too many buyers meaning the cost of the goods will rise.
Prices will allocate resources in a single market. The purchases we make at a store feeds into the demand for the product.
Principles of Macroeconomics Spring 2020 