Ceteris Paribus, When the Supply of Beef Increases, Beef Prices Will Change by a Greater Amount

1. If consumers expect the price of some good to rise next week, then we mostly detect the toll of the good rising this week. Explain this fact using a graph.

If the good is storable, and an increase in cost is expected, consumers will want to buy the good today, earlier the toll increases. As a outcome, the current demand for the good increases, which results in an increase in the cost of the good today. See graph.

2. The drought in the plain states has made grain, and therefore feed, quite expensive. Many ranchers cannot beget to feed their cattle, and have sold much of their herd for slaughter.
a. What will exist the firsthand upshot of this effect on the equilibrium toll and quantity of beef? Illustrate using a supply and demand diagram.

Slaughtering the cows volition result in an increase in the supply of beef to the marketplace, which will in plough lead to a decrease in the equilibrium price of beef and an increase in the equilibrium quantity of beef. See graph.

Market for beef

b. Chicken and beef are substitute appurtenances. Illustrate the effect that the slaughter of the cattle herds will accept on the equilibrium price and quantity of chicken.

Equally the price of beefiness decreases, consumers will purchase more beef and less chicken. The demand for chicken volition decrease, causing a decrease in the equilibrium price and quantity of craven. See graph.
Market for chicken

c. As it happens, the slaughter of beef cattle has coincided with a decrease in consumers' income. Assuming that steak is a normal good while hamburgers are an junior good, apply a supply-and-need diagram for either market place to illustrate the combined effect of the two same events on the equilibrium cost and quantity of hamburgers and steak.

As consumers' income decreases, the need for normal appurtenances (such as steak) decreases while the demand for inferior appurtenances (such equally hamburgers) increases. Keep in mind that our decision from role a is nonetheless valid. A lower price of beef volition increase the supply of all appurtenances in which beefiness is an input. Therefore in each of the two markets in question we deal with simultaneous shifts in supply and demand.

3. Assume that the markets for sugar pikestaff, rum, and whiskey are initially in equilibrium. Assume farther that Hurricane Marilyn destroys much of the Jamaican sugar cane crop. Sugar cane is a principal ingredient in rum, just it is not an ingredient in whiskey. Analyze the effect of the hurricane on the markets for each of the three goods. Explain using graphs.

Step One - The market place for carbohydrate cane
The Hurricane results in a decrease in supply (at any given toll, sellers are no longer able to provide as much pikestaff every bit they used to). As a issue, the equilibrium cost of sugar cane will increase, and the equilibrium quantity will decrease. See graph.
Market for sugar cane

Step Two - The marketplace for rum
Carbohydrate cane is a principal ingredient in rum, and information technology is now more than expensive. An increment in the price of inputs causes a decrease in supply. As a effect, the equilibrium price of rum volition increase, and the equilibrium quantity will subtract. The graph will exist similar to the one above.

Step Three - The market for whiskey
It is reasonable to presume whiskey and rum are substitutes. Rum is now more expensive than it used to be (see Step Two). Equally a issue, more consumers will purchase whiskey instead. This will crusade an increment in the demand for whiskey, which leads to higher equilibrium price and quantity of whiskey. Encounter graph.
Market for whiskey

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Source: https://www.washburn.edu/sobu/dnizovtsev/200P03_SD2ans.html

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