Shift Storm

News headlines fall towards the market for a good, drawn as a demand-and-supply diagram. Answer each one before it lands: which curve does the news shift, and which way? Your answer always goes to the lowest headline, marked in gold.

• Demand ← (← or A) and Demand → (→ or D): demand falls or rises.
• Supply ← (J or Z) and Supply → (L or X): supply falls or rises.
• No shift (N or Space, Advanced only): the news is a change in the good's own price.

A right call zaps the headline and the curve moves: the new equilibrium settles, and dotted lines mark the old price and quantity. A wrong call, or a headline that reaches the market, costs a life (you have 5), and the market still moves the way it really would, so you can see why. Each hit scores 10, plus 2 for each hit in your streak (up to 30 a hit). The market changes every few headlines, and the headlines come faster the longer you last.

Core keeps to the clear causes of a shift. Advanced adds related goods, expectations, taxes and subsidies, the number of firms, inferior goods and a change in the good's own price; and a headline marked + P & Q asks a second question, which way price and quantity go, answered with the same buttons (they become P ↑ Q ↑, P ↑ Q ↓, P ↓ Q ↑ and P ↓ Q ↓) while the headlines wait.

What shifts demand

Anything that changes how much buyers want at every price: incomes (up for a normal good; for an inferior good, such as instant noodles, demand falls as incomes rise), tastes and fashion, health news and advertising, the population, the seasons, the price of a substitute (dearer tea raises demand for coffee) or a complement (dearer electricity lowers demand for electric cars), and what buyers expect to happen to the price.

What shifts supply

Anything that changes how much sellers offer at every price: costs of production (wages, raw materials, energy, freight), technology, the weather, disease and disasters (for crops and farms), the number of firms, indirect taxes (supply falls) and subsidies (supply rises), and what sellers expect to happen to the price.

Shift or movement along?

A change in the good's own price never shifts its own demand or supply curve: it is a movement along them (a contraction or an extension). "The price of coffee rises, so people buy fewer cups" is a movement along the demand curve for coffee. But a change in the price of another good (tea, petrol, electricity) does shift the curve.

Price and quantity

• Demand rises (→): price rises and quantity rises. Demand falls (←): both fall.
• Supply rises (→): price falls and quantity rises. Supply falls (←): price rises and quantity falls.

Objective: identify the causes of shifts in demand and supply, tell a shift of a curve from a movement along it, and predict the effect of a shift on the equilibrium price and quantity (for example, Cambridge IGCSE Economics 0455, 2.3 to 2.6; Cambridge International AS Level Economics 9708, the price system; IB Economics, 2.1 to 2.3; AP Microeconomics, unit 2).