### Understanding the Toilet Paper Shortage of Early 2020: An Economic Perspective#### IntroductionDuring the early months of 2020, at the height of the coronavirus pandemic, many experienced a sudden and surprising scarcity of toilet paper. This phenomenon raised questions: why toilet paper of all things? While many explanations exist, the most common answer points to hoarding behavior. People, wanting to ensure they had enough supplies at home, bought excessive amounts of toilet paper. The urgency and anxiety caused by the pandemic made this mundane product seem essential.#### Analyzing the ShortageTo understand the economic principles behind this shortage, consider the concept of supply and demand. Most individuals witnessed this shortage firsthand, which provides a practical case study to explore economic models.#### Questions for ConsiderationAssuming the reason for the shortage was primarily hoarding, let’s delve into the economic representation of this scenario. You are encouraged to draw your analysis using the four-step method outlined in the text section 3.3. Compare your drawn diagram with the provided graphs.##### TaskChoose the graph that best graphically represents the situation of hoarding causing the toilet paper shortage from the four provided below.### Graph Analysis#### Graph 1- **Description:** This graph shows the supply and demand curves intersecting at an equilibrium price and quantity.- **Relevance:** This represents a standard market condition where supply meets demand without any unusual circumstances, such as hoarding.#### Graph 2- **Description:** This graph shows a rightward shift of the demand curve.- **Relevance:** This could indicate an increase in demand, likely due to hoarding behavior. As a result, the equilibrium price increases, and so does the quantity demanded.#### Graph 3- **Description:** This graph shows a leftward shift of the supply curve.- **Relevance:** This might represent a scenario where supply is reduced, but in the context of hoarding, it's not the primary cause.#### Graph 4- **Description:** This graph displays both a leftward shift of the supply curve and a rightward shift of the demand curve.- **Relevance:** This could represent a combined scenario where supply is somehow reduced and demand increases simultaneously.### ConclusionAmong the four graphs, **Graph 2** best represents the situation resulting from hoarding. The increased demand for toilet paper, driven by panic-buying and stockpiling, shifted the demand curve to the right.

Why was there a shortage of toilet paper in early 2020 at the height of the Corona virus pandemic? There are many answers, but the most common explanation is hoarding; people wanting to make sure they had enough supply at home. But why toilet paper? It makes sense to hoard hand sanitizer and face masks, but toilet paper? Most of us had first hand experience with this shortage. Answer the questions below. Assuming the reason for the shortage was the result of hoarding (there were several other reasons), explain which graph below best describes the situation. Use a scrap piece of paper to draw your diagram using the 4 step method mentioned in the text section 3.3, and compare to the graphs below. Choose the graph that best graphically represents the situation. 10.00 10.00 8.00 6.00 600 4.00 400 2.00 2.00 00 200 400 00 00 10 00 0 00 0 00 200 400 6.00 800 10'00 1 2 10.00 10 00 8.00 .00 6.00 600 4.00 4.00 2.00 2.00- 000 0.00 0.00 00 0e 10 00 200 400 200 4:00 6.00 10'00 4

Why was there a shortage of toilet paper in early 2020 at the height of the Corona virus pandemic? There are many answers, but the most common explanation is hoarding; people wanting to make sure they had enough supply at home. But why toilet paper? It makes sense to hoard hand sanitizer and face masks, but toilet paper? Most of us had first hand experience with this shortage. Answer the questions below. Assuming the reason for the shortage was the result of hoarding (there were several other reasons), explain which graph below best describes the situation. Use a scrap piece of paper to draw your diagram using the 4 step method mentioned in the text section 3.3, and compare to the graphs below. Choose the graph that best graphically represents the situation. 10.00 10.00 8.00 6.00 600 4.00 400 2.00 2.00 00 200 400 00 00 10 00 0 00 0 00 200 400 6.00 800 10'00 1 2 10.00 10 00 8.00 .00 6.00 600 4.00 4.00 2.00 2.00- 000 0.00 0.00 00 0e 10 00 200 400 200 4:00 6.00 10'00 4

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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