Sometimes the exports of developing nations are concentrated in only one or a few primary products. For example, according to World Bank data, coffee constitutes almost 90% of Burundi’s total exports. Therefore, changes in demand or supply of coffee can have significant effects on the health of Burundi’s economy. The current world price of coffee is $5.00 per pound, but there is uncertainty about the shape of the demand and supply curves. The following graphs (scenario A and scenario B) show two possibilities for demand and supply in the market for coffee. Suppose that favorable growing conditions cause an increase in the global supply of coffee. On the following graph, shift the demand or supply curve of scenario A to show what happens in the market for coffee as a result of this event. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.
Sometimes the exports of developing nations are concentrated in only one or a few primary products. For example, according to World Bank data, coffee constitutes almost 90% of Burundi’s total exports. Therefore, changes in demand or supply of coffee can have significant effects on the health of Burundi’s economy. The current world price of coffee is $5.00 per pound, but there is uncertainty about the shape of the demand and supply curves. The following graphs (scenario A and scenario B) show two possibilities for demand and supply in the market for coffee. Suppose that favorable growing conditions cause an increase in the global supply of coffee. On the following graph, shift the demand or supply curve of scenario A to show what happens in the market for coffee as a result of this event. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Sometimes the exports of developing nations are concentrated in only one or a few primary products. For example, according to World Bank data, coffee constitutes almost 90% of Burundi’s total exports. Therefore, changes in demand or supply of coffee can have significant effects on the health of Burundi’s economy.
The current world price of coffee is $5.00 per pound, but there is uncertainty about the shape of the demand and supply curves. The following graphs (scenario A and scenario B) show two possibilities for demand and supply in the market for coffee.
Suppose that favorable growing conditions cause an increase in the global supply of coffee.
On the following graph, shift the demand or supply curve of scenario A to show what happens in the market for coffee as a result of this event.
Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.
Transcribed Image Text:PRICE (Dollars)
10
9
8
SO
5
4
3
2
0
0
1
2
Scenario B
4
Supply
3
5
6
7
QUANTITY (Pounds of coffee)
8
Demand
9
10
Demand
Supply
?
Transcribed Image Text:PRICE (Dollars)
10
9
8
7
6
5
3
2
0
0
1
2 3
Scenario A
4
Supply
Demand
5
6
7
QUANTITY (Pounds of coffee)
8
9
10
Demand
Supply
?
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