Consider each scenario independently. In each of the following cases, provide an explanation and draw a graph to show:– (a) What will happen in the market for wine if the price of cheese increases (wine and cheese are complements)? (b) What will happen in the market for brewed coffee if the price of coffee beans decreases? (c) What will happen in the market for lobster if the government reduces the income tax and lobsters are a normal good? (d) What will happen in the market for tomatoes if a new study is released that shows tomatoes contain antioxidants (may help prevent cancer)? (e) What will happen in the market for corn if a new crop rotation technique is discovered that allows corn to be grown more easily and the price of green beans, a substitute, decreases? (f ) What will happen in the market for gasoline if the price of oil increases and there is a vast increase in the population (e.g., another baby boomer generation)? (g) A tax on gun buyers. (h) A binding price floor on guns.
1. Consider each scenario independently. In each of the following cases, provide an explanation and draw a graph to show:–
(a) What will happen in the market for wine if the price of cheese increases (wine and cheese
are complements)?
(b) What will happen in the market for brewed coffee if the price of coffee beans decreases?
(c) What will happen in the market for lobster if the government reduces the income tax and
lobsters are a normal good?
(d) What will happen in the market for tomatoes if a new study is released that shows tomatoes
contain antioxidants (may help prevent cancer)?
(e) What will happen in the market for corn if a new crop rotation technique is discovered that
allows corn to be grown more easily and the price of green beans, a substitute, decreases?
(f ) What will happen in the market for gasoline if the price of oil increases and there is a vast
increase in the population (e.g., another baby boomer generation)?
(g) A tax on gun buyers.
(h) A binding
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Can I see a graph for 1. (b) to illustrate the price of coffee beans increasing.
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