Consider the markets for pasta and Prego spaghetti sauce. Assume that a cold spell in the wheat growing areas of the country led to a large fall in the production of wheat (the crucial input in the production of pasta ). Using appropriate diagrams, explain the effects of this cold spell on the markets for spaghetti and Prego spaghetti sauce, explicitly stating what happens to demand, supply, equilibrium price and equilibrium quantity exchanged in each market, and why

Consider the markets for pasta and Prego spaghetti sauce. Assume that a cold spell in the wheat growing areas of the country led to a large fall in the production of wheat (the crucial input in the production of pasta ). Using appropriate diagrams, explain the effects of this cold spell on the markets for spaghetti and Prego spaghetti sauce, explicitly stating what happens to demand, supply, equilibrium price and equilibrium quantity exchanged in each market, and why

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter3: Demand And Supply

Section: Chapter Questions

Problem 5SCQ: Lets think about the market for air travel. From August 2014 to January 2015, the price of jet fuel...

See similar textbooks

Similar questions

In an analysis of the market for paint, an economist discovers the facts listed below. State whether each of these changes will affect supply or demand, and in what direction. There have recently been some important cost-saving inventions in the technology for making paint. Paint is lasting longer so that property owners need not repaint as often. Because of severe hailstorms, many people need to repaint now. The hailstorms damaged several factories that make paint, forcing them to close down for several months.
As a general rule, is it safe to assume that a change in the price of a good will always have its most significant impact on the quantity demanded of that good, rather than on the quantity demanded of miller goods? Explain.
Explain why the following statement is false: In the goods market, no buyer would be willing to pay more than me equilibrium price.
What is consumer surplus? How is it illustrated on a demand and supply diagram?
Suppose there is a soda tax to curb obesity. What should a reduction in the soda tax do to the supply of sodas and to the equilibrium price and quantity? Canyon show this graphically? Hint: Assume that the soda tax is collected from the sellers.
If a 10 decrease in the price of one product that you buy causes an 8 increase in quantity demanded of that product, will another 10 decrease in the price cause another 3 increase (no more and no less) in quantity demanded?
Lets think about the market for air travel. From August 2014 to January 2015, the price of jet fuel increased roughly 47. Using the four-step analysis, how do you think this fuel price increase affected the equilibrium price and quantity of air navel?
What is the relationship between quantity Demanded and quantity supplied at equilibrium? What is the relationship when there is a shortage? What is the relationship when them is a surplus?
Many changes are affecting the market for oil. Predict how each of the following events will affect the equilibrium price and quantity in the market for oil. In each case, state how the event will affect the supply and demand diagram. Create a sketch of the diagram if necessary. Cars are becoming more fuel efficient, and therefore get more miles to the gallon. The winter is exceptionally cold. A major discovery of new oil is made off the coast of Norway. The economies of some major oil-using nations, like Japan, slow down. A war in the Middle East disrupts oil-pumping schedules. Landlords install additional insulation in buildings. The price of solar energy falls dramatically. Chemical companies invent a new, popular kind of plastic made from oil.
When analyzing a market, how do economists deal with the problem that many factors that affect the market are changing at the same time?
How can you locate the equilibrium point on a demand and supply graph?
Suppose both of these events took place at the same time. Combine your analyses of the impacts of the iPod and the tariff Induction to determine the likely impact on the equilibrium price and quantity of Sony Walkman-type products. Shaw your answer graphically.