Given That Chicken and Beef Are Substitue Goods

i. If consumers expect the price of some good to rise side by side week, and then we by and large notice the toll of the good ascension this calendar week. Explicate this fact using a graph.

If the good is storable, and an increase in toll is expected, consumers volition want to buy the good today, before the price increases. Equally a issue, the electric current demand for the good increases, which results in an increase in the price of the good today. Run into graph.

2. The drought in the manifestly states has fabricated grain, and therefore feed, quite expensive. Many ranchers cannot afford to feed their cattle, and take sold much of their herd for slaughter.
a. What volition be the immediate effect of this event on the equilibrium price and quantity of beef? Illustrate using a supply and demand diagram.

Slaughtering the cows will result in an increase in the supply of beefiness to the market, which will in plow lead to a decrease in the equilibrium price of beef and an increment in the equilibrium quantity of beef. See graph.

Market place for beef

b. Chicken and beefiness are substitute goods. Illustrate the outcome that the slaughter of the cattle herds will accept on the equilibrium price and quantity of craven.

Every bit the price of beefiness decreases, consumers will purchase more beefiness and less chicken. The demand for craven will subtract, causing a decrease in the equilibrium price and quantity of craven. See graph.
Marketplace for chicken

c. As it happens, the slaughter of beefiness cattle has coincided with a decrease in consumers' income. Assuming that steak is a normal good while hamburgers are an inferior good, employ a supply-and-demand diagram for either market place to illustrate the combined issue of the two aforementioned events on the equilibrium cost and quantity of hamburgers and steak.

As consumers' income decreases, the demand for normal goods (such as steak) decreases while the demand for inferior goods (such as hamburgers) increases. Proceed in heed that our conclusion from part a is notwithstanding valid. A lower price of beef volition increase the supply of all goods in which beef is an input. Therefore in each of the two markets in question we deal with simultaneous shifts in supply and demand.

iii. Assume that the markets for sugar cane, rum, and whiskey are initially in equilibrium. Assume further that Hurricane Marilyn destroys much of the Jamaican sugar cane crop. Sugar cane is a principal ingredient in rum, but it is non an ingredient in whiskey. Analyze the effect of the hurricane on the markets for each of the iii goods. Explain using graphs.

Pace One - The market for saccharide cane
The Hurricane results in a subtract in supply (at any given cost, sellers are no longer able to provide as much cane as they used to). Equally a result, the equilibrium cost of sugar cane will increase, and the equilibrium quantity will decrease. Run across graph.
Market for sugar cane

Pace Two - The market for rum
Carbohydrate cane is a principal ingredient in rum, and it is now more expensive. An increase in the price of inputs causes a decrease in supply. As a upshot, the equilibrium toll of rum will increase, and the equilibrium quantity will decrease. The graph will be similar to the one above.

Step Three - The market for whiskey
It is reasonable to assume whiskey and rum are substitutes. Rum is now more than expensive than information technology used to be (encounter Step Ii). Equally a result, more consumers volition purchase whiskey instead. This volition cause an increase in the demand for whiskey, which leads to college equilibrium price and quantity of whiskey. See graph.
Market for whiskey

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Source: https://www.washburn.edu/sobu/dnizovtsev/200P03_SD2ans.html

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