According to the Australian Wool Innovation, severe drought conditions in Australia contributed to the lowest level of wool production in 50 years. This record low production has driven up prices sharply in Australian wool markets. Meanwhile, the price of raw cotton increased significantly for the first time in many years. a.       Illustrate this observation with one demand and supply graph for the market for Australian wool and another demand and supply graph for raw cotton. b.       Make sure that your graphs clearly show (1) the initial equilibrium before the decrease in the supply of Australian wool and (2) the final equilibrium. c.       Use arrows to indicate any shifts in the demand and supply curves for each market. d.       Label your graphs fully and write an explanation of your work.

Question

According to the Australian Wool Innovation, severe drought conditions in Australia contributed to the lowest level of wool production in 50 years. This record low production has driven up prices sharply in Australian wool markets. Meanwhile, the price of raw cotton increased significantly for the first time in many years.

a.       Illustrate this observation with one demand and supply graph for the market for Australian wool and another demand and supply graph for raw cotton.

b.       Make sure that your graphs clearly show (1) the initial equilibrium before the decrease in the supply of Australian wool and (2) the final equilibrium.

c.       Use arrows to indicate any shifts in the demand and supply curves for each market.

d.       Label your graphs fully and write an explanation of your work.

Expert Answer

1 Rating

Want to see the step-by-step answer?

See Answer

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Answer
*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.
Tagged in

Related Economics Q&A

Find answers to questions asked by student like you

Q: Suppose that an initial $ 10 billion increase in investment spending expands GDP by $ 10 billion in ...

A: Given:Change in consumption = $6 billionChange in income = $10 billion(We know, GDP = C + I + G + (X...

Q: 100 90 80 ATC 70 50 30 AVC 20 MC 10 + 0 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pans) ...

A: In perfect competition we assume that the marginal cost curve is same as the supply curve. The below...

Q: Consider the market for paper towels where the supply curve is upward sloping and the demand curve i...

A: a. The price ceiling is a type of price restriction imposed by the government in which a price less ...

Q: suppose that the election of a popular candidate suddenly increases people’s confi- dence in the fut...

A: The aggregate demand curve is defined as the sum total of all expenditure in the economy. The increa...

Q: At prices below equilibrium, the quantity exchanged is equal to the quantity supplied. True, false, ...

A: When the price is below equilibrium point, people demand more and producers supply less amount of go...

Q: Question 28 Consider a firm with production function f(L,K)=3L1/3K2/3. Assume that capital is fixed ...

A: The average fixed cost (AFC) is determined by taking the ratio of total fixed cost with the total ou...

Q: What are the major characteristics of a firm competing under conditions of monopolistic competition?...

A: 1.The monopolistic competition is the market condition in which there are many producers and they se...

Q: Given the following data: Gross Investment Expenditure.. .$200 Government Transfer Payments...150 Bu...

A: Hey, Thank you for the question. According to our policy we can only answer upto 3 subparts per sess...

Q: a) What are the determinants of production? Explain.b) Suppose that an economy’s production function...

A: The production function is a function that shows the relationship between output produced in an econ...