Economics+Challenge+2

=The class challenge is to:= =a. complete the following report (by replacing the ###### with words) so that it reads well and makes sense;= =b. answer the questions below=


 * Assume that the state is experiencing a very long and extremely cold winter.**

The winter of **2010** will long be remembered by Victorians. Who would have expected the **Yarra** river to freeze over? The sub-zero temperatures led to a dramatic increase in demand for **goods** and **services**. Unfortunately for the shivering **consumers**, the sudden surge in demand for **heating appliances** led to s**hortages** and a sharp drop in the supply of **heaters**. Who would have expected doctors and **nurses** in hospitals to have to deal with so much frostbite?

The snow-storms certainly kept Melburnians off the roads for weeks and led to an increase in demand for **soups, jumpers** and **electricity** at home.

Many people will remember **lining** -up outside shops hoping to buy **goods** despite the dramatic **inflation** in prices caused by the **shortfall** of supply. On the other hand, demand for **restaurants** and **theatres** decreased so much, that some producers almost went out of business.

1. Make a list of producers and traders you feel would benefit from an extremely cold winter.
 * Questions:**

2. How are prices for goods and services determined in our Economy? (using the terms supply and demand)

3. If you walk into a shop and see a price tag for $79.99 on an expensive wide-screen plasma TV can you make the store sell you the item for this (obviously incorrect) price?