This assignment is to test your understanding of Demand & Supply. Each question should be answered in your own words accompanied by a diagram showing what is happening to demand & supply. Please use graph paper for your diagrams.

In September of 2006 Hurricane Chantel hit Florida and caused over a billion dollars in damage to homes and businesses, infrastructure, etc. At the same time the province of BC was recovering from a forest fire season that destroyed millions of hectares of forest. Explain the impact these natural disasters had on the demand for, supply of, and price of lumber in North America.

Using the information below prepare a graph to clarify your answer starting at equilibrium. The change in quantity of supply or demand is 1,000,000 board feet for each of the aforementioned shocks. What is the new equilibrium?

Price per Quantity demanded Quantity Supplied

board foot (millions of board ft)

$2 6 0

3 5 1

4 4 2

5 3 3

6 2 4

7 1 5