Use a supply-and-demand diagram of a competitive market to illustrate the qualitative effects of the following possible shocks in the Italian market for red wine. a. A new research study shows that red wine helps prevent heart disease, stave off aging, and reduce age-related memory decline. b. Trade barriers that restricted imports of red wine from countries outside the European Union are eliminated.c. A recession in Italy causes a decline in per capita income. d. Genetically engineered wine grapes are created that allow for greater red wine production without increasing cost.
Use a supply-and-demand diagram of a competitive market to illustrate the qualitative effects of the following possible shocks in the Italian market for red wine. a. A new research study shows that red wine helps prevent heart disease, stave off aging, and reduce age-related memory decline. b. Trade barriers that restricted imports of red wine from countries outside the European Union are eliminated.c. A recession in Italy causes a decline in per capita income. d. Genetically engineered wine grapes are created that allow for greater red wine production without increasing cost.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Use a supply-and-demand diagram of a competitive
market to illustrate the qualitative effects of the
following possible shocks in the Italian market for
red wine.
a. A new research study shows that red wine
helps prevent heart disease, stave off aging, and
reduce age-related memory decline.
b. Trade barriers that restricted imports of red
wine from countries outside the European
Union are eliminated.c. A recession in Italy causes a decline in per capita
income.
d. Genetically engineered wine grapes are created
that allow for greater red wine production without increasing cost.
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