Answer to Question #293006 in Microeconomics for Fati

Question

Q. 6. Explain each of the following statements using supply-and-demand diagrams. [only graph]

a. “When a cold snap hits Florida, the price of orange juice rises in supermarkets throughout the country.”

b. “When the weather turns warm in New England every summer, the price of hotel rooms in Caribbean resorts drop.”

c. “When a war breaks out in the Middle East, the price of gasoline rises and the price of a used Cadillac falls.”

 

Q. 7. Over the past 30 years, technological advances have reduced the cost of computer chips. How do you think this has affected the market for computers? For computer software? For typewriters? [only graph]

 

Q. 8. Using supply-and-demand diagrams, show the effect of the following events on the market for sweatshirts. [Explain step by step like we did in the class]

a. A hurricane in South Carolina damages the cotton crop.

b. All colleges require morning exercise in appropriate attire.

c. Both ‘a’ and ‘b’ occur together and the effect of ‘a’ is greater than the effect of ‘b’

 

 

Answer 1

Q6

a.

b.

c.

Q7

Q8

a.

b.

c.