ECONOMICS

1. i) What are the differences between a demand curve and a supply curve? ii) What are the differences between: a) movement along the demand curve and b) shift in demand? movement along the supply curve and d) shift in supply? ill) What are the factors influence a), b), c) and d)? Explain. 2. Given the demand and the supply for cars at the market. Price of Cars SO DO * Quantity of Cars For the following questions, refer to the graph shown above. a. Label the equilibrium point as EO, the equilibrium quantity as Q0, and the equilibrium price as PO. b. Show how the supply curve will change if car manufacturers achieve a technological breakthrough that allows them to produce cars more cheaply. c. If the price stayed at PO, would a surplus or a shortage result from the technological breakthrough described in part (b)? Answer in words, and show on the graph. d. Assuming market forces work quickly, show the new equilibrium price to which the market will adjust. Label this point as E2. Label the new equilibrium quantity as Q2, and the new equilibrium price as P2