I find that many IB students will often confuse the factors that change supply with demand. I find a common example of this is the impact of tax, with students mixing the impact of a change in income tax (change in demand) with the impact of a change in sales taxes, which effect supply through a change in production costs. This page contains three short exercises for your classes to practise on - they may not need all three of course.
Lesson time: 1 hour, although this depends on how many of the activities that your classes complete.
Opening question on Samsung
Where do Samsung manufacture their smart phones?
The following examples all relate to possible changes in either the supply or demand for Samsung LCD televisions in Istanbul, Turkey. These goods are manufactured in South Korea and distributed in Turkey. Illustrate any change to the market after the following examples:
1. A rise in income levels in Turkey
2. A rise in oil prices.
3. A successful advertising campaign by the Turkish government to purchase locally made goods rather than foreign products.
4. A fall in the popularity of Korean products?
5. A fall in world wide aluminium prices?
6. A rise in the level of minimum wage in turkey?
7. A fall in the value of the Turkish Lira relative to the price of Korean Won.
8. A fall in income tax rates in Turkey.
9. A rise in the level of Turkish sales taxes.
10. An improvement in technology leading to greater productivity levels within Samsung.
The above questions are available as a PDF at: Activity 1
1. The market for bus travel in a city following the opening of a new tram line network?
2. The market for for luxury cars city following a large rise in disposable income levels?
3. The market for bicycles if the price of bicycles went up?
4. The market for holidays in the Mediterranean following a very warm and sunny summer in Northern Europe?
5. The market for tube journeys following a fall in the price of tube journey tickets?
6. The market for new I phones following the high profile launch of a new model?
This exercise is available as a downloadable worksheet at: Activity 2
Using fully labelled diagrams illustrate any changes to the market for each product in the following situations:
1. The market for coke if the government places a sugar tax on all fizzy soft drinks?
2. The market for apple Iphones following the launch of a new model by Samsung?
3. The market for cars in a nation following a reduction in taxes on imported cars?
4. The market for Pepsi following a successful advertising by doctors on the negative impacts of fizzy drinks on children’s health?
5. The market for football tickets following a successful world cup campaign by the country’s national team?
6. The market for conventional flat screen TVs following the development of a new affordable cinema system for the home?
Available as a PDF file at: Activity 3