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Unformatted text preview: An earthquake destroys the entire orange crop in California. a) Show the impact of the earthquake on the market for oranges. b) Congress is trying to limit the impact of the earthquake on the price of oranges. Would it advocate a price floor or a price ceiling? Why? c) What is the impact of the policy you chose in (b) on the market for oranges? 3. Read the article “Corks at Dawn” (available on Blackboard). Use the information in the article and what you have learned about supply and demand to answer the following questions. a) Suppose the only changes that occurred between last year and this year were the financial crisis and subsequent economic turndown. Show the impact on the market for champagne. Why has the turndown affected the market in this way? b) Show the impact of the changes in (a) on the market for champagne grapes. Justify your answer....
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This note was uploaded on 04/28/2011 for the course ECON 1101 taught by Professor Rappoport during the Fall '08 term at Temple.
- Fall '08