Consider the following events that affect the market for oranges in the US. Suppose that both of these following events occur simultaneously: (i) the price of Apples (which is assumed as the perfect substitute for oranges) decreases; and (ii) bad weather and droughts that reduce the harvest of oranges by 60%. Based on the two scenarios provided, what would happen to the market for oranges in the US: O a. The equilibrium price of oranges could either increase or decrease, but equilibrium quantity will definitely increase. O b. The equilibrium quantity of oranges could either increase or decrease, but equilibrium price will definitely increase. O c. The equilibrium quantity of oranges could either increase or decrease, but equilibrium price will definitely decrease. O d. The equilibrium price of oranges could either increase or decrease, but equilibrium quantity will definitely decrease.

Figure 5 below represents two different shifts that occurs in the market for potato chips. All of the shifts go from the curves labeled with a "1" to curves labeled with a "2". Assume that potato chips are an inferior good. Refer to the figure as you answer the questions that follow. P Shift 1 S2 S1 D1 Figure 5 Shift 2 S1 D1 D2 Ơ

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The graph shows the market for cashews. What is the equilibrium price of cashews? What is the equilibrium quantity of cashews? Is the market for cashews efficient or inefficient? Why? CIER The equilibrium price of cashews is $ a pound and the equilibrium quantity of cashews is pounds. The market for cashews is O A. inefficient only if the cost of growing all the cashews is an average of $6.00 a pound OB. efficient because the marginal benefit of cashews equals the marginal cost of producing them, which is $6.00 a pound OC. inefficient because growers of cashews receive a large producer surplus O D. efficient because the benefit of each pound of cashews consumed equals the cost of growing it OE. efficient only if the total benefit of the cashews equals $6.00 a pound billion A 12.00- 10.00- 8.00- 6.00+ 4.00- 2.00- 0.00+ 0 Price (dollars per pound) S 3 9 12 6 Quantity (billions of pounds per year) D 15 Q Q