Using supply-and-demand diagrams explain how the following events would affect the supply or demand in each market (draw the original demand and supply and in the same graph draw the NEW demand or supply-showing your shifts) and how the quantity and price of in equilibrium will be affected:
a) What happens in the market for tablet computers if: the price of monthly data plans required to access the internet everywhere using a tablet computer falls in price?
b) What happens in the market for grapes if: several medical studies show that drinking red wine in moderation is good for the heart?
c) What happens in the market for ramen noodles if: there is a world-wide recession that lowers consumers' incomes (assume ramen noodles are an inferior good)?
Based on the following production Possibility Frontiers for United States and South Korea, please answer a-e:
a) Which country has the absolute advantage in the production of wheat and which one has the absolute advantage in the production of automobiles?
b) What is the opportunity cost of producing 1 bushel of wheat (in terms of cars) in the US and in South Korea?
c) What is the opportunity cost of producing 1 car (in terms of wheat) in the US and in South Korea?
d) Which country has the comparative advantage in the production of wheat, and which country has the comparative advantage in the production of cars?
e) According to which theory this specialization is possible?