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Assignment
1. Watch the following video clip (BTN takes a look at the factors behind the rise in price of bananas) and answer the following questions.Behind the News.
1. Using supply and demand curves explain how the cyclone would affect the price and quantity of bananas. Make sure you explain in your answer why prices have gone up by such a large amount.
2. The bananas were called luxuries in the video. Do you think that this is strictly true? If bananas were luxuries what would this mean for the supply and demand curves? In turn what would this mean for the price and quantity of bananas following the cyclone compared to the case in 6a?
3. What would be the impact on elasticity of supply if it were possibly to increase the imports of bananas?
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