Microeconomics,, 16th Canadian Edition

a. A medical study reports that eating chicken reduces the
likelihood of suffering from particular types of heart
problems.
b. A widespread bovine disease leads to an increase in the
price of beef.
c. Average household income increases.
8. Consider the world supply of cocoa beans, the main input in the
production of chocolate. For each of the events listed below, state
and explain the likely effect on the supply of cocoa beans. How
would each event be illustrated in a diagram?
a. Ideal growing conditions lead to a bumper crop of cocoa
beans in Ivory Coast, the largest supplier of cocoa beans.
b. A dramatic rise in the world price of coffee beans.
Assume that farmers growing cocoa beans can easily
grow coffee beans instead.
c. Wages for farm labour in cocoa-growing regions rises.
d. Farmers in various parts of the world see profits being
earned by cocoa farmers and choose to enter this
industry.
9. For each of the following statements, determine whether there
has been a change in supply or a change in quantity supplied.
Draw a demand-and-supply diagram for each situation to show
either a movement along the supply curve or a shift of the supply
curve.
a. The price of Canadian-grown peaches skyrockets during
an unusually cold summer that reduces the size of the
peach harvest.