Chapter 1. Chapter 3b

Step 1

Solved Problems

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You must read each slide, and complete any questions on the slide, in sequence.

Question

The following graph represents the supply (S) and demand (D) for orange juice.

The graph shows ‘Quantity’ on the horizontal axis, and ‘Price’ on the vertical axis. The demand curve is a downward sloping line, while the supply curve is an upward sloping line.

If bad weather harms orange groves in Florida:

The zgYtJu571s2e+U6uXbRIkxTjArY= curve shifts because BIyjQZgsNKnhQolMEyRFkvaUItRs0h4v are mainly affected.

Oranges are used in making orange juice, so producers will be primarily affected.

Step 2

Question

The orange juice supply curve shifts because 1I9a1uCNY45s63EREzRmujZwduXSyAJLTa3Ab/UnSlNpTPA9njPU6ydt4XZsyf/lhhVX2p2pjTcT4ZkQiyTk1jEGTM6yE+ot.

Oranges are an input in producing orange juice.

Step 3

Question

The orange juice supply curve shifts rmBT3kQ7hV9LhKQVBeTdjg== because input costs go up.

Rising input prices shift the supply curve left, and decreasing input prices shift it right.

Step 4

Question

As a result of the leftward shift of the supply curve, the equilibrium price of orange juice will J6brYKf/NFTMGA+ssGsCfrJ3rMxuCcVX03OGC1aCY4z1oHxw.

As might be expected, higher costs for producers mean higher prices for consumers, which is consistent with a leftward shift of the supply curve.

Step 5

Question

As a result of the leftward shift of the supply curve, the equilibrium quantity of orange juice will YKTXk1Jw32MiGPRFM4GH8CGSxf38NGsOviyWvzGlyS3x6YC+.

As might be expected, fewer oranges mean lesser orange juice, which is consistent with a leftward shift of the supply curve.