1. Refer to the diagram below: Price (per bushel) $10 9 8 7 65402 3 2 1 0 X 2 4 S 6 8 10 12 Quantity of wheat (thousands of bushels per period) D (a) Suppose that the government introduced a new migration policy which has led to an increase in the number of consumers in the market. Due to this policy change, there is an increase in demand of 2,000 bushels at each price, what would be the new equilibrium price and quantity of bushels? Show the impact on the graph above and label it A. (b) Shortly after the announcement of the new immigration policy, there was a wild fire that destroyed some of the wheat harvesting plains. This led to a decrease in supply of 2,000 bushels at each price at the same time. What would be the new equilibrium price and quantity of bushels (Hint: your starting equilibrium should be A)? Show the impact on the graph above and label it B.

1. Refer to the diagram below: Price (per bushel) $10 9 8 7 65402 3 2 1 0 X 2 4 S 6 8 10 12 Quantity of wheat (thousands of bushels per period) D (a) Suppose that the government introduced a new migration policy which has led to an increase in the number of consumers in the market. Due to this policy change, there is an increase in demand of 2,000 bushels at each price, what would be the new equilibrium price and quantity of bushels? Show the impact on the graph above and label it A. (b) Shortly after the announcement of the new immigration policy, there was a wild fire that destroyed some of the wheat harvesting plains. This led to a decrease in supply of 2,000 bushels at each price at the same time. What would be the new equilibrium price and quantity of bushels (Hint: your starting equilibrium should be A)? Show the impact on the graph above and label it B.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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