This assignment has two scenarios (see below). For each scenario, determine the following tasks (in order):

1. Draw an original market equilibrium that describes the state of the market before the given scenario occurs. Clearly label both axis, label each a single supply curve and a single demand curve, and label the original equilibrium.
2. Does the scenario cause a shift in the demand and/or supply curve? If so, which curve, which direction? Describe.
3. Draw the shift(s) in the supply and/or demand curve as you described for the previous prompt.
4. Label the new equilibrium price and quantity.
5. Describe what is the impact of the scenario on the equilibrium price and equilibrium quantity

Scenarios

These are the 2 scenarios. You will determine each of the five tasks above for each scenario.

1. The COVID-19 pandemic caused a disruption of the production of manufactured goods throughout the world, including the production of bicycle frames and components. At the same time, while people worked from home and attended school from home, had limited social interaction, and had limited opportunities for fitness, more people desired to take up bicycling as a hobby. What is the impact on the market for bicycles?
2. Straw used for farm animal feed is an agricultural by-product of producing cereal plants such as grain. It comes from the dry stalks after the grain and chaff have been removed. Suppose higher global demand for grain leads to higher international prices for grain. Describe and illustrate the impact on the market for straw.

Criteria for Success

You may present this information in whatever format is most appealing for you as long as I can see your graphs for the four different situations above and clearly tell which graph is which. Here are some suggestions:

• Draw on paper and take pictures or scan, paste images into a Word document, and submit that file. Be sure to label which graph is which.
• Construct the graphs using PowerPoint. Label the graphs. Submit the PowerPoint.