February 24, 2017

Homework Help: economics

Posted by Billy on Sunday, September 17, 2006 at 5:04pm.

For each event, illustrate the impact on the relevant United States market and determine what will happen to the equilibrium price and quantity in that market. I have 2 demand and supply graphs, the first one is for 3 of them and the second is for the last one. I just need someone to tell me if
my answers are right, my answers have a star beside them.

a)Increased popularity among high protein diets.

***Demand curve shifts to the right:Increase in equilibrium price and quantity.

b)Ban on Canadian imports of beef(We are in a US market.

***Supply curve shifts to the left:Increase in Price and decrease in quantity.

c)Persistent drought increases the price of grain feed to cattle.

***Supply curve shifts to the left: Increase in Price and decrease in quantity.

d)Incomes of ranchers increase.(Use Second Graph)

***Demand curve shifts to the right:Increase in Price and quantity.

Are these answers correct??

Think about d) a bit more. Why does the demand curve shift? Ranchers income rises so demand for beef by ranchers rises, ergo overall demand shifts right. So your answer is fine.

But, is there a supply response? I suggest that increasing income of ranchers will cause other ag folks to re-think their product mix. That is, more people will become attracted to ranching, shifting the supply of beef outward.

Sorry, forgot to say your answers to a,b, and c are correct.

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