Assignment:
instructor Assignable Problems and Applications
1. If after heavy rain and low production, the weather improves and coffee
growers enjoy bumper crops, how does
• The demand for coffee change?
• The supply of coffee change?
• The price of coffee change?
Illustrate your answer with a graphical analysis.
What is the effect on the equilibrium price and equilibrium quantity of orange juice if the price of apple juice decreases and the wage rate paid to orange grove workers increases?
0What is the effect on the equilibrium in the orange juice market if orange juice becomes more popular and a cheaper robot is used to pick oranges? Table 1 shows the demand and supply schedules for boxes of chocolates in an verage week. Use this information to work Problems 4 and 5.
If the price of chocolates is $17.00 a box, describe the situation in the market. Explain how market equilibrium is restored.
During Valentine's week, more people buy chocolates and chocolatiers offer their chocolates in special red boxes, which cost more to produce than the everyday box. Set out the three-step process of analysis and show on a graph the adjustment process to the new equilibrium. Describe the changes in the equilibrium price and the equilibrium quantity.
After a severe bout of foreclosures and defaults on home loans, banks made it harder for people to borrow. How does this change influence
• The demand for new homes?
• The supply of new homes?
• The price of new homes?
Illustrate your answer with a graphical analysis.
7. Alabama food prices jump in May
Alabama Farmers Federation announced that food prices in May will increase. In previous unprofitable years, farmers reduced their herds with the result that in 2009 meat production will fall. Bacon is expected to rise by 32 cents a pound to $4.18 and steaks by 57 cents to $8.41 a pound.
Source: The Birmingham News, May 21, 2009 Explain why the reduction of herds will lead to a rise in meat prices today. Draw a graph to illustrate.
Does the cancellation of orders demanded, the supply of steel, the equilibrium price of steel?