Identify causes for shifts in supply and demand for the chosen product
In our daily life we use a lot of commodities, among them coffee, tea, sugar, salt, bread, beans, meat, oil, gas, cotton, gold, silver, and many others. Supply and demand for these products changes with the flow of time and the causes may be quite different. Let us speak about coffee, for example. We may face shifts in supply and demand when the price goes up if workers demand higher wages, in this case both factors will decrease; coffee beans which are killed by blight cause decrease in supply, but not demand; it is shown on the rats that coffee may cause cancer, so people might fear to get the disease and reduce drinking it, which will lead to demand decrease; declined price for tea, as a coffee substitute, is also the reason of decreasing demand as people might want to buy cheaper goods in order to save money. Thus, price fall leads to supply quantity decrease.
Explain how labor market equilibrium is affected by the supply and demand of labor
As people who are considered to be labor market sell services and goods, they make up the supply which may increase because of different factors. Demand of labor is changed because of the workforce size, cost and others. Labor market may reach equilibrium in case ‘the amount of workers willing to work for a certain price equals the amount of workers employers are willing to hire for that wage’.
Compare and contrast public goods, private goods, common resources, and natural monopolies
Public goods are items which are consumed by society, here belong parks, fresh air, street lightning. The consumption of the product by one person will not cause its reduction to others. Contrary to them, private goods, such as appliances, food and others, are purchased for individual consumption and they can’t be available for free. Recourses that are accessible to all society members who wish to get benefits from it are called common resources. Their main problem is overuse which leads to economic problems. Natural monopoly may be defined as an industry which supplies demand for goods or services of the market at a lower price than other firms do, and the reasons for it are natural ones.
Describe the characteristics of competitive markets, monopolies, and oligopolies
A market which is represented by a large number of sellers and buyers and where not only one buyer or seller may influence the price is called a competitive market. Contrary to it, a monopoly is the only supplier of a commodity and is characterized by lack of competition. A market structure in which several firms or sellers dominate is an oligopoly.