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

The objective of this question is to understand the impact of a decrease in the supply of a key…

Answered: Consider the markets for pasta and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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For each of the following changes in the demand or supply curves in the automobile market below, draw a graph showing the old demand and supply curves as well as the new demand or supply curve (whichever shifts). Also show how the equilibrium price and equilibrium quantity change. Show work on 3 different graphs. With lower trade barriers, foreign automakers export more cars to the U.S. U.S. automobile workers unionize. Due to research and development (R&D), new technologies enable automakers to produce cars much faster.
Suppose that in 2007 Ford sold 500,000 Mustangs at an average price of $18,800 per car; in 2008, 600,000 Mustangs were sold at an average price of $19,500 per car. From these statements what changes in supply or demand on the market for Mustangs produced such changes in equilibrium? (One graph. Start by plotting two points (price versus quantity, shift either supply or demand, not both) and then draw supply and demand graphs through them in a way that explains the change in the equilibrium from 2007 to 2008.
Over the past 20 years, the average price of avocados has more than doubled. Assume that the price of avocados is determined by the forces of supply and demand. Using concepts that you have learned about supply and demand, explain whether the following is or is not a cause of the increase in price of avocado. Restrictions on imports of avocados from Mexico were gradually lifted. Improved production methods allowed for slower ripening of avocados and therefore more avocados can be reliably shipped. Mexican food, which regularly features avocados, has become more popular.
Using supply and demand diagrams show the effects on equilibrium price and quantity for the following situations. Begin at an initial equilibrium and show the effects on the demand or supply curves, as well as the effect on equilibrium price and quantity. (You can just draw them by hand and upload the picture.) The impact of a drought in the Midwest on the market for wheat. The impact of a fall in the price of steel on the market for new cars. The impact of a study showing orange juice consumption lowers the risk of heart attacks on the market for orange juice, and on the market for cranberry juice. The impact of an increase in the price of hot dogs on the market for hot dog buns.
In each of the following scenarios, explain the changes in either supply or demand that would result. If the initial equilibrium price were yet to change, indicate whether a surplus or a shortage would result. Given this, what do you expect will subsequently happen to the price of the good? In the market for paper: New advances in recycling technology reduce the cost of producing paper made from recycled materials. In the market for lightbulbs: Recently General Electric, one of the largest suppliers of light bulbs, decided to discontinue producing light bulbs. In the market for Las Vegas hotels: A heat wave in Las Vegas causes tourists to cancel their hotel room reservations and vacation elsewhere.
Use supply and demand curves to show and explain how both the equilibrium price and quantity change in each case. a) The increasing adoption of over-the-top media streaming services lead to more people staying at home to watch movies rather than going to a movie theater. Show how this change in behavior affects the market for microwave popcorn. b) The severe winter storm in Texas agricultural regions caused a massive electricity generation failure and increased the costs of irrigation and energy. How would this affect the market for fruits and vegetables?
What are the effects on the equilibrium price and quantity of chocolate if information becomes available that eating chocolate makes your hair fall out and at the same time the price of sugar that is needed to make chocolate reduces by 10 percent? Clearly state the effect on demand and supply and whether equilibrium price and/or quantity have increased, decreased or whether the outcome is uncertain.

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