Consider the following events: Scientists reveal that eating oranges decreases the risk of diabetes, and at the same time, farmers use a new fertilizer that makes orange trees produce more oranges. Illustrate and explain what effects these changes have on the equilibrium price and quantity of oranges. Let’s solve this with baby steps. First, Scientists reveal that eating oranges decreases the risk of diabetes. Is this a demand or supply issue? (please answer) Will this increase or decrease it? (please answer) Please draw a graph (below) to show the change and the effects on the new equilibrium. Be sure to label it. Did price increase of decrease? (please answer) Did quantity increase or decrease? (please answer) Second, farmers use a new fertilizer that makes orange trees produce more oranges. Is this a demand or supply issue? (please answer) Will this increase or decrease it? (please answer) Please draw a graph (below) to show the change and the effects on the new equilibrium. Be sure to label it. Did price increase of decrease? (please answer) Did quantity increase or decrease? (please answer) When you look at both sets of graphs you drew, (Scientists reveal that eating oranges decreases the risk of diabetes AND farmers use a new fertilizer that makes orange trees produce more oranges) , What happened to price in each case? (please answer) What happened to quantity in each case? (please answer) Overall, which can we say (price or quantity) will increase with certainty? (please answer) Overall, which (price or quantity) can we say may or may not increase/ decrease? Why?
- Consider the following events: Scientists reveal that eating oranges decreases the risk of diabetes, and at the same time, farmers use a new fertilizer that makes orange trees produce more oranges. Illustrate and explain what effects these changes have on the
equilibrium price and quantity of oranges. Let’s solve this with baby steps.
First, Scientists reveal that eating oranges decreases the risk of diabetes.
Is this a
Will this increase or decrease it? (please answer)
Please draw a graph (below) to show the change and the effects on the new equilibrium. Be sure to label it.
Did price increase of decrease? (please answer)
Did quantity increase or decrease? (please answer)
Second, farmers use a new fertilizer that makes orange trees produce more oranges.
Is this a demand or supply issue? (please answer)
Will this increase or decrease it? (please answer)
Please draw a graph (below) to show the change and the effects on the new equilibrium. Be sure to label it.
Did price increase of decrease? (please answer)
Did quantity increase or decrease? (please answer)
When you look at both sets of graphs you drew, (Scientists reveal that eating oranges decreases the risk of diabetes AND farmers use a new fertilizer that makes orange trees produce more oranges)
,
What happened to price in each case? (please answer)
What happened to quantity in each case? (please answer)
Overall, which can we say (price or quantity) will increase with certainty? (please answer)
Overall, which (price or quantity) can we say may or may not increase/ decrease? Why?
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