1)Ceteris paribus, assume recently there was a severe drought that hit the south-eastern part of the United States (US) where most peanuts are grown.In response to the drought, assume the US government decided to allow more foreign peanuts (increase in imports) to come into the US from countries like China and Argentina.

(a)Use graphical demand and supply analysis to support your explanation of the impact quantity of the market for peanuts in the US.Assume the drought has a larger effect on the peanut market than the increase in imports.(Hint: Show the impact of the drought first, then followed by the impact of higher imports on the same diagram).

(b)Following the likely market response from the drought and an increase in imports (answer from part a), discuss how consumers would likely react to the consumption of peanuts now?

2) Suppose that the government imposes a minimum wage policy for workers in factories that produce computers but not on workers that produce computer accessories.

a) Using supply and demand analysis, show the effect of implementing a minimum wage on the computer labour market.

3) Assume the market for wheat display's the following characteristics, namely many buyers and sellers, produce identical products and have no barriers to entry or exit.

a) Now assume there has been a permanent decrease in demand for wheat.Using appropriate diagrams explain what will happen to price and quantity for wheat at both the industry and firm level.(Hint: You need to discuss what type of profits, if any, each firm is making).

b) With the use of appropriate diagrams, discuss the adjustment process, at both industry and firm level, to bring the market for wheat back to long-run equilibrium.