Final answer:
Shifts in demand or supply indicate changes in non-price determinants, resulting in a new curve; movements along a curve reflect changes in quantity in response to price changes.
Step-by-step explanation:
The difference between shifts of demand or supply versus movements along a demand or supply curve lies in what causes the change on the graph. A shift in the supply or demand curve indicates a change in the underlying factors other than price that affect the entire curve, whereas a movement along the curve indicates a change in the quantity demanded or supplied in response to a change in price.
When an entire supply curve shifts, it is due to underlying factors known as supply determinants. For instance, if a technological advancement allows watches to be produced at half the time, the supply would increase and shift the entire supply curve to the right. Conversely, if the cost of a key material like leather goes up, the supply curve for watches would shift to the left, indicating a decrease in supply.
In contrast, a movement along the supply curve occurs when there is a change in the quantity supplied due to a change in the price of the product itself. For example, if the price of watches goes up and watchmakers are willing to offer more watches for sale at the higher price, there is a movement up along the supply curve.
In summary, a shift entails a whole new curve due to underlying changes in the market, while a movement signifies a change in quantity supplied or demanded along the same curve due to a change in price.