Supply and demand diagram to explain the increase

Assignment Help Business Economics
Reference no: EM13891995

Brazil is the world's largest coffee producer. There was a severe drought in Brazil in 2013-2014 that damaged Brazil's coffee crop. The price of coffee beans doubled during the first three months of 2014.

a) Draw and discuss a supply and demand diagram to explain the increase in coffee prices.

b) Are coffee and tea substitutes or complements? Explain.

c) What do you think the impact of this drought has been on the equilibrium price and quantity of tea? Draw a supply and demand diagram for the tea market to explain your answer.

Reference no: EM13891995

Questions Cloud

Consumption is function of disposable income : In the model that we have studied, consumption is a function of disposable income or income minus taxes C(Y −T), which implies that taxes T are a lump-sum subtraction from income Y. Derive the expression for the government purchases multiplier dY dG ..
Identify the new equilibrium price after the shift : You are going to display what happens in the long run in perfectly competitive markets when firms are operating at a loss. Demonstrate the shift that will occur in the market in the long run if all firms in this market are operating at a loss. Identi..
How simultaneous shifts in demand and supply curves : Explain how simultaneous shifts in demand and supply curves could explain this situation: A pest attack on the tomato crop increases the cost of producing ketchup. A mild winter causes cattle herds to be unusually large, causing the price of hamburge..
Calculate mrts and determine slope of the isoquant : Consider the production function q=4L^.3K^.8. K is not fixed in the long run. Graph the isoquant for Q=4. Identify and label 3 points on the graph. Calculate MRTS and determine slope of the isoquant of the three points you identified. label the slope..
Supply and demand diagram to explain the increase : Brazil is the world's largest coffee producer. There was a severe drought in Brazil in 2013-2014 that damaged Brazil's coffee crop. The price of coffee beans doubled during the first three months of 2014. Draw and discuss a supply and demand diagram ..
Did the equipment purchase prove to be desirable : A company purchased some equipment at a very favorable price of $35,000. The equipment resulted in an annual net saving of $2000 per year during the 8 years it was used. At the end of 8 years, the equipment was sold for $45,000. Assuming interest at ..
What impact would a rise in consumer income have on demand : What impact would a rise in consumer income have on the demand for cars?
Inflation has been reality for the general economy : Inflation has been a reality for the general economy of the U.S. In many years. Given this assumption, calculate the number of years it will take for the purchasing power of today's dollars to equal one-fifth of their present value. Assume that infla..
Estimate the actual or real world effective multiplier : Suppose the Stimulus package (The American Recovery and Reinvestment ACT of 2009) for $862 (originally it amount was approved for $787 billion and subsequently increased to $862 billion) was allocated for spending in all 3 components of the AE model ..

Reviews

Write a Review

 

Business Economics Questions & Answers

  Example of multiple equilibria in the labour market

Elucidate using the example of multiple equilibria in the labour market. Illustrate diagrammatically

  Dotcom bubble in the stock market burst

Around 2000, the dotcom bubble in the stock market burst and the US entered a recession. What would the neo-classical policy prescription have been for the US government and the Federal Reserve to do about this recession? How would this have operated..

  Draw budget constraint for individual with composite good

An individual has an income of $1000 per month with which they buy the composite good with a price of $1 and food with a price $2/unit of food. draw the budget constraint for the individual with the composite good on the y-axis and food on the x-axis..

  Inflation-free rate-effective interest rate

The inflation-free rate (real rate) is 2.3% per year and the inflation rate is 2.03% per year. The effective interest rate (market rate) is therefore

  Suppose that you have

Suppose that you have two people in an economy, Ms. Hundley and Mr. McKenna, who want to produce a public good S. Suppose we calculate the Lindahl equilibrium using the method in your textbook

  Madelyn owns a small pottery factory

Madelyn owns a small pottery factory. She can make 1,000 pieces of pottery every year also sell them.

  How many earplugs will he consume

Quasimodo has a demand function for earplugs that is given by the equation D(p) = 100 − p. (a) If the price of earplugs is $50, how many earplugs will he consume? (b) If the price of earplugs is $70, how many earplugs will he consume? (c) What is the..

  Q consider an economy where consumers utility function is

q. consider an economy where consumers utility function is given as uclc-12l2 . where c is consumption and l is labor.

  Fixed money growth rule

We mentioned Milton Friedman's advice that central bankers should follow a "fixed money growth rule," where the broad money supply (M1 or M2) grows the same rate every year. What is the difference between a fixed money growth rule and nominal GDP tar..

  Assuming that the income effect is negligible

Assuming that the income effect is negligible, how much will he be hurt if the cost of strawberries goes from $1 a pint to $2 a pint.

  Determined three trades-offs

These 3 basic trade-offs include which goods or services are to be created, how to create them, also who gets them.

  When the market supply curve shifts inward-consumer surplus

Everything else equal, when the market supply curve shifts inward, consumer surplus. Everything else equal, given an upward sloping supply curve, if the market demand curve were to shift outward, producer surplus

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd