1. Consider the market for wheat where the current price is above equilibrium price. Does the market currently have a surplus or a shortage? Describe the adjustment that will take place to restore equilibrium in the wheat market. 2. Consider the market for wheat where the current price is below equilibrium price. Does the market currently have a surplus or a shortage? Describe the adjustment that will take place to restore equilibrium. 3. For each of the following examples, describe the likely change in market equilibrium for the US. beef market. Be sure to describe the change in equilibrium price and quantity. a. An average increase in income for Chinese residents. Assume beef is a normal good. b. A new health study suggests that eating beef increases the chance of heart disease. c. The price of broiler chickens decreases. Assume beef and broiler chickens are substitutes. d. There is an increase in the price of feed grain used to produce beef. e. An increase in farm bankruptcies reduces the number of farms producing beef. 1. Consider the effects of the corona virus on the U.S. beef market. China was one of the fastest growing markets for [1.5. Beef before most of the country shutdown. Additionally, many beef processing plants in the U.5. were required to shut down for a short time during quarantine. Use the shape function to draw arrows on the accompanying figure to show the direction of change for the supply and demand curves. Also, use a text box to label the initial demand curve D1 and the new demand curve D2. Similarly, use a text box to label the initial supply curve 51 and the new supply curve 52. Discuss the effects on market equilibrium from these changes. 1I.l"u'hat is the effect on quantity and what is the effect on price? quantity and what is the effect on price: Market Lines T B Price C I D Quantity5. Adam Smith, the father of modern-day economics; championed the idea of market equilibrium. Smith used this concept to solye a classic economic puzzle known as the I.ryater for diamonds paradox. The paradox asks why water which is bountiful but necessary is relatiyely cheap, while diamonds - which are mostly ornamental and not necessary - are expensive. Using the concept of market equilibrium show why water is relatiyely cheap and diamonds are relatiyely expensiye