http://baylorlariat.com/wp-content/uploads/2011/04/040711_cartoon1.jpg

This cartoon depicts the idea of derived demand. In the cartoon the producer/business (witch figure) changes her product in order to comply with the demand of green sources of energy that her closest customers value. Even though the seller has not actually switched her product yet, it is a classic example of allocative efficiency in todays society. This applies to our analysis of where to set prices and how to be successful in business, and our knowledge to produce at Price=Marginal Cost due to being allocatively efficient.

http://www.shanghaidaily.com/nsp/Business/2013/01/17/Oil%2Bjumps%2Babove%2BUS94%2Bon%2BUS%2Bsupply%2Breport/

This article is another classic example of shifting in supply and demand. Since not as much oil was imported into the US the supply of oil to sell to consumers, the supply curve shifted left, or upward. The graphs that we have been covering in class show that this shift implys a increase in price and a decrease in quantity sold, which is exactly what happened. This relates back to our basic understanding of how to apply the supply and demand graph to real world situations to get a better understanding of how economics works.

http://business.time.com/2013/01/16/virginia-is-worried-cars-are-becoming-too-fuel-efficient/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+time%2Fbusiness+%28TIME%3A+Top+Business+Stories%29&utm_content=Netvibes

This article is a classic example of supply and demand in todays economy. It displays the cause and effects of a shift in demand for fuel. Since the demand for fuel shifted left, or downward, both price and quantity of the product sold will decrease. With no shift in supply, the government had to apply a sales tax on the oil to shift the curve back to equilibrium. This is a clear representation of our earlier chapters, and is a good example of a real world application of the shifting of supply and demand graphs.