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2) We learnt last week that the Demand Curve slopes downwards, draw a graph showing the Supply Curve, think about what way you expect it to slope, why this is the case?

2) We learnt last week that the Demand Curve slopes downwards, draw a graph showing the Supply Curve, think about what way you expect it to slope, why this is the case?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Second question b
11:16 (suo, aiyle httpsapi.schoology.co... Rude awakening as price of coffee and orange juice shoots up 20% Drought in main growing areas in Brazil and a tree-killing bug have caused a spike in the price of breakfast favourites Savour your morning juice and coffee this weekend, because the price of your favourite breakfast drinks may be on the way up. Unfavourable weather in Brazil – varying from droughts to heavy rainfall and frosts – has driven up the price of coffee, sugar and orange juice around the world by more than 20% in the past few months. The London traded November futures contract on robusta beans, the type mostly used to make instant coffee, has risen by a third since June to $2,027 (£1,561) a tonne on the ICE exchange after the main growing areas of Espirito Santo and Bahia were hit by drought, leaving farmers with only half their potential crop. The recent rise in price was also driven by concerns about next year's crop. With reservoirs dry or nearly empty in the regions, farmers have been reliant on annual rains to provide the moisture needed to kickstart coffee plants' flowering season, and there has been precious little precipitation. "There has been rain but it's not enough to repair the damage," said Carlos Mera, a commodities analyst at Rabobank. Brazil is the world's biggest producer of high quality arabica coffee and the second largest grower of robusta beans. More than a quarter of coffee imported to the UK comes from Brazil, The country also produces 80% of the oranges traded on worldwide markets, more than half of which head to Europe, and exports nearly three times more sugar than any other country. The price of orange juice concentrate has risen 21% since June to more than $2 a lb on the New York futures market, a level described as "astronomically high" by Andres Padilla, a senior commodities analyst at Rabobank based in Brazil. Padilla says prices have not been close to this level since 2006. Although globally we are drinking 4% to 5% less orange juice every year, production fell by a fifth in Brazil in the latest harvest year which finished in June, and by nearly a quarter in the world's second biggest producing region – Florida. Both areas were affected by the tree-killing Huanglongbing bug, better known as citrus greening. Brazil's harvest was already expected to be down year-on-year because of the bug, but as the crop was processed it emerged that heavy rains had left oranges with lower sugar content so that it takes more fruit to make each tonne of concentrate, the commodity exported around the world. Summary Questions: 1) Explain why the price of coffee and orange Juice has increased by 20% 2) We learnt last week that the Demand Curve slopes downwards, draw a graph showing the Supply Curve, think about what way you expect it to slope, why this is the case?
Transcribed Image Text:11:16 (suo, aiyle httpsapi.schoology.co... Rude awakening as price of coffee and orange juice shoots up 20% Drought in main growing areas in Brazil and a tree-killing bug have caused a spike in the price of breakfast favourites Savour your morning juice and coffee this weekend, because the price of your favourite breakfast drinks may be on the way up. Unfavourable weather in Brazil – varying from droughts to heavy rainfall and frosts – has driven up the price of coffee, sugar and orange juice around the world by more than 20% in the past few months. The London traded November futures contract on robusta beans, the type mostly used to make instant coffee, has risen by a third since June to $2,027 (£1,561) a tonne on the ICE exchange after the main growing areas of Espirito Santo and Bahia were hit by drought, leaving farmers with only half their potential crop. The recent rise in price was also driven by concerns about next year's crop. With reservoirs dry or nearly empty in the regions, farmers have been reliant on annual rains to provide the moisture needed to kickstart coffee plants' flowering season, and there has been precious little precipitation. "There has been rain but it's not enough to repair the damage," said Carlos Mera, a commodities analyst at Rabobank. Brazil is the world's biggest producer of high quality arabica coffee and the second largest grower of robusta beans. More than a quarter of coffee imported to the UK comes from Brazil, The country also produces 80% of the oranges traded on worldwide markets, more than half of which head to Europe, and exports nearly three times more sugar than any other country. The price of orange juice concentrate has risen 21% since June to more than $2 a lb on the New York futures market, a level described as "astronomically high" by Andres Padilla, a senior commodities analyst at Rabobank based in Brazil. Padilla says prices have not been close to this level since 2006. Although globally we are drinking 4% to 5% less orange juice every year, production fell by a fifth in Brazil in the latest harvest year which finished in June, and by nearly a quarter in the world's second biggest producing region – Florida. Both areas were affected by the tree-killing Huanglongbing bug, better known as citrus greening. Brazil's harvest was already expected to be down year-on-year because of the bug, but as the crop was processed it emerged that heavy rains had left oranges with lower sugar content so that it takes more fruit to make each tonne of concentrate, the commodity exported around the world. Summary Questions: 1) Explain why the price of coffee and orange Juice has increased by 20% 2) We learnt last week that the Demand Curve slopes downwards, draw a graph showing the Supply Curve, think about what way you expect it to slope, why this is the case?
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