Question

In: Economics

Suppose we are analyzing the market for oranges in 2017. Graphically illustrate the impact of each...

Suppose we are analyzing the market for oranges in 2017. Graphically illustrate the impact of each of the following events would have on supply and demand curves. Also show how equilibrium price and quantity would change in each scenario. See instruction video, "Week 2_Homework Guideline.ppsm". Make sure you provide narrative discussions on each scenario to receive full credits A. In 2017, Wildfires destroyed a majority of orange farms, reducing orange production substantially (Graphical analysis + Written discussion=at least 100 words) B. The price of apple, orange substitute, decreased in 2017. (Graphical analysis + Written discussion=at least 100 words)

Solutions

Expert Solution

(A) If wildfire destroys a majority of orange farms, the production of oranges fall, which results in a decrease in the supply of oranges. As supply of oranges fall, the supply curve for oranges shift toward right. The demand for oranges remaining unchanged, lower supply leads to higher equilibrium price of oranges and lower equilibrium quantity of oranges.

In following graph, price of oranges is measured vertically and quantity of oranges is measured horizontally. D0 and S0 are initial demand and supply curve of oranges respectively, intersecting at initial equilibrium point A with initial price P0 and quantity Q0. As supply falls, the supply curve shifts left from S0 to S1, intersecting D0 at point B with higher equilibrium price P1 and lower equilibrium quantity Q1.

(B) If price of apples, a substitute for oranges, decrease, then quantity demanded of apples will rise and demand for oranges will fall. As a result, the demand curve for oranges shift toward left. The supply for oranges remaining unchanged, lower demand leads to lower equilibrium price of oranges and higher equilibrium quantity of oranges.

In following graph, price of oranges is measured vertically and quantity of oranges is measured horizontally. D0 and S0 are initial demand and supply curve of oranges respectively, intersecting at initial equilibrium point A with initial price P0 and quantity Q0. As demand falls, the demand curve shifts left from D0 to D1, intersecting S0 at point B with lower equilibrium price P1 and lower equilibrium quantity Q1.


Related Solutions

Suppose we are analyzing the market for oranges in 2017. Graphically illustrate the impact of each...
Suppose we are analyzing the market for oranges in 2017. Graphically illustrate the impact of each of the following events on consumer or producer surplus. In 2017, Wildfires destroyed a majority of orange farms, reducing the orange production substantially, and what would be the impacts on consumer surplus? (Graphical analysis + Written discussions = at least 100 words) The price of apple, orange substitute, decreased in 2017. What would be the impacts on producer surplus? (Graphical analysis + Written discussions...
Suppose we are analyzing the market for oranges in 2017. Graphically illustrate the impact of each...
Suppose we are analyzing the market for oranges in 2017. Graphically illustrate the impact of each of the following events would have on supply and demand curves. Also show how equilibrium price and quantity would change in each scenario. Make sure you provide narrative discussions on each scenario to receive full credits A. In 2017, Wildfires destroyed a majority of orange farms, reducing orange production substantially (Graphical analysis + Written discussion=at least 100 words) B. The price of apple, orange...
Suppose we are analyzing the market for oranges in 2017. Graphically illustrate the impact of each...
Suppose we are analyzing the market for oranges in 2017. Graphically illustrate the impact of each of the following events on consumer or producer surplus. A. In 2017, Wildfires destroyed a majority of orange farms, reducing the orange production substantially, and what would be the impacts on consumer surplus? (Graphical analysis + Written discussions = at least 100 words) B. The price of apple, orange substitute, decreased in 2017. What would be the impacts on producer surplus? (Graphical analysis +...
Suppose we are analyzing the market for oranges in 2017. Graphically illustrate the impact of each...
Suppose we are analyzing the market for oranges in 2017. Graphically illustrate the impact of each of the following events would have on supply and demand curves. Also show how equilibrium price and quantity would change in each scenario. See instruction video, "Week 2_Homework Guideline.ppsm". Make sure you provide narrative discussions on each scenario to receive full credits A. In 2017, Wildfires destroyed a majority of orange farms, reducing orange production substantially (Graphical analysis + Written discussion=at least 100 words)...
1.Suppose we are analyzing the market for ice cream. Explain clearly and illustrate graphically the impacts...
1.Suppose we are analyzing the market for ice cream. Explain clearly and illustrate graphically the impacts of each of following would have on the demand and/or supply a Summer starts and the weather becomes hotter. b. A more efficient method of milking cows is introduced . c. Producers expect the price of ice cream to increase next month dThe price of popsicles falls. eBoth a and b occurs simultaneously . f Both c and d occurs simultaneously .
a.) Suppose we are analyzing the market for automobile tires. Explain the impact of each of...
a.) Suppose we are analyzing the market for automobile tires. Explain the impact of each of the following on demand or supply, indicate the direction of the shift (left or right), and show how equilibrium price and quantity would change. i.) An increase in the number of auto buyers ii.) Government levy a new tax on each auto tire produced iii.) Government decided to subsidy $2 per unit for each auto tire produced iv.) A decrease in the number of...
Graphically illustrate how each of the following events, ceteris paribus, will affect the competitive market. (Start...
Graphically illustrate how each of the following events, ceteris paribus, will affect the competitive market. (Start new graph for each question.) Your diagrams must include competitive market equilibrium and post-government intervention: prices, quantities, consumer/producer/total surpluses, and dead-weight-losses. A price ceiling is imposed on rental apartments A price floor in form of minimum wage. Solar panels are subsidized. An excise tax is placed on sugary drinks.
Graphically illustrate the impact of the following events on real GDP per capita in a balanced-...
Graphically illustrate the impact of the following events on real GDP per capita in a balanced- growth-path equilibrium. Keep in mind that the Solow model graph provides qualitative predictions for variables such as real GDP per effective worker (y), and that real GDP per capita is given by Y/L = A × y. a) For the first time in modern history, the birthrate in Japan falls below the mortality rate. (5 points) b) A megathrust earthquake, much like the 2004...
Graphically illustrate the impact of an open-market purchase by the Federal Reserve on the equilibrium interest rate using the theory of liquidity preference and the market for real money balances.
a. Graphically illustrate the impact of an open-market purchase by the Federal Reserve on the equilibrium interest rate using the theory of liquidity preference and the market for real money balances. Be sure to label: i. the axes; ii. the curves; iii. the initial equilibrium values; iv. the direction the curve shifts; and v. the terminal equilibrium values. b. Explain in words what happens to the equilibrium interest rate as a result of the open-market purchase.
Suppose that the economy is originally in a steady state of capital. Illustrate graphically the effect...
Suppose that the economy is originally in a steady state of capital. Illustrate graphically the effect on capital per worker when the savings rate decreases. Suppose that the economy is originally in a steady state of capital. Illustrate graphically the effect on capital per worker when the population growth rate increases.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT