Assume that the markets for sugar cane, rum, and whiskey are initially in equilibrium (i.e., supply equals demand in each case). Assume further that a good harvest impacts the world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes in consumption. Discuss the impact of the good harvest on each of the three markets.
Assume that the markets for sugar cane, rum, and whiskey are initially in equilibrium (i.e., supply equals demand in each case). Assume further that a good harvest impacts the world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes in consumption. Discuss the impact of the good harvest on each of the three markets.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Assume that the markets for sugar cane, rum, and whiskey are initially in equilibrium
(i.e., supply equals demand in each case). Assume further that a good harvest impacts
the world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not
an ingredient in whiskey. Rum and whiskey are substitutes in consumption.
Discuss the impact of the good harvest on each of the three markets.
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