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1、EffectsofaShiftintheSupplyandDemandCurvesSomeeventscauseboththesupplycurveandthedemandcurvetoshift.Ifbothshift,thenthequalitativeeffectontheequilibriumpriceandquantitymaybedifficulttopredict,evenifweknowthedirectioninwhicheachcurveshifts.Changesintheequilibriumpriceandquantitydep
2、endonexactlyhowthecurvesshift:seethefollowingapplicationandsolvedproblemandtherelatedquestionsattheendofthechapter.ApplicationMadCow:ShiftingSupplyandDemandCurvesGovernmentannouncementsthatthefataldiseaseknownasmadcow(bovinespongiformencephalopathy,orBSE)hasbeenfoundinacountry’sc
3、attleaffectbothsupplyanddemandcurves.HumanswhoconsumebeefproductsmadefromdiseasedanimalpartscandevelopnewvariantCreutzfeldt-Jakobdisease,adeadlyafflictionthatslowlyeatsholesinsufferers’brains.Madcowdiseasecantakeyearstodevelopincattle,andsymptomsinitshumanversionmaynotappearforde
4、cades.Consequently,identifyingthepresenceofthediseasehasbeendifficult.In1986,theBritishgovernmentdisclosedacaseofmadcowdisease,butinitiallyassertedthathumanswerenotatriskfromeatinginfectedbeef.Sincethen,180,000casesofmadcowhavebeenreportedintheUnitedKingdom.Notuntil1996didtheBrit
5、ishGovernmentannouncethatpeoplewerefallingvictimtoadegenerativenewbraindiseaselinkedtoBSE.FollowingthisannouncementandsimilarannouncementsforFrance,Italy,andGermany,manyBritishandotherEuropeanconsumersstoppedbuyingbeefcausingthebeefdemandcurvesinEuropeancountriestoshifttotheleft.
6、Overtime,manycattlewereremovedfromthefoodchainandEuropeanbeefproducersreducedtheirherds,sothatthesupplycurvesalsoshiftedtotheleft.Consequently,beefconsumptionplummetedinEuropeinthe1990s.Japanfounditsfirstcasein2001.Two-thirdsofbeefsoldinJapanin2001wasimported:49%fromAustraliaand4
7、6%fromtheUnitedStates.Immediatelyfollowingthedomesticmadcowdiscovery,beefconsumptioninJapanfellby60%(includinga30%dropinimports,whichwerenotimplicated).AsurveyofJapaneseconsumersfoundthat86%saidthattheyhadreducedtheirconsumptionsincetheannouncement.Toprotectandreassureconsumers,J
8、apanstartedtestingall1.2millioncattletha
