Assignment 3 - Assignment 3 Please read chapter 4 and...

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Assignment 3 Please read chapter 4 and answer the following questions: 1- ) Using demand and supply curves, discuss the effect of each of the following on the market for cigarettes: a) A cure for lung cancer is found. – right ward shift b) The price of cigars increases. - left ward shift c) Wages increase substantially in states that grow tobacco. – right ward shift d) A fertilizer that increases the yield per acre of tobacco is discovered. – left ward shift 2- ) How do you think each of the following affected the world price of oil? a) A major war began in the oil rich Middle East. – left ward shift b) The Alaskan oil pipeline was completed.- right ward shift c) People drove less. – right ward shift d) Oil was discovered in the North Sea – right ward shift. 3- ) Suppose that there are freezing temperatures in Florida. At the same time the press reports that drinking orange juice significantly reduces the risk of stomach cancer. Predict the effect on equilibrium price and quantity. 4- ) The Contracting and Organizations Research Institute at the University of Missouri maintains lots of interesting information about the evolution of the firm. Please visit the Institute’s Web site
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This note was uploaded on 10/16/2010 for the course ECO economic taught by Professor A during the Spring '10 term at Montana University System.

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Assignment 3 - Assignment 3 Please read chapter 4 and...

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