For each of the fol- 7.2. Comparative statics: aspartame, oil. lowing, use a supply and demand diagram to deduce the impact of the event on the stated market. Would you expect the impact to be primarily on price or quantity? Feel free to mention issues that you don't think are captured by a traditional supply and demand analy- sis. (a) Event: The FDA announces that aspartame may cause cancer. Market: Saccharin. (Note: aspartame and saccharin are low-calorie sweeteners.) (b) Event: Oil price increases. Market: California electricity.

For each of the fol- 7.2. Comparative statics: aspartame, oil. lowing, use a supply and demand diagram to deduce the impact of the event on the stated market. Would you expect the impact to be primarily on price or quantity? Feel free to mention issues that you don't think are captured by a traditional supply and demand analy- sis. (a) Event: The FDA announces that aspartame may cause cancer. Market: Saccharin. (Note: aspartame and saccharin are low-calorie sweeteners.) (b) Event: Oil price increases. Market: California electricity.

EBK HEALTH ECONOMICS AND POLICY

7th Edition

ISBN:9781337668279

Author:Henderson

Publisher:Henderson

Chapter2: Using Economics To Study Health Issues

Section: Chapter Questions

Problem 1QAP

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