Answered step by step
Verified Expert Solution
Question
1 Approved Answer
(30%) China chicken prices have jumped significantly, and African swine fever is the major reason. African swine fever has spread to all Chinese provinces since
(30%) China chicken prices have jumped significantly, and African swine fever is the major reason. African swine fever has spread to all Chinese provinces since the first case was confirmed in August, posting a serious threat to the pork industry. It kills off the pig supply causing pork prices to soar'. (a) Use the indifference curve-budget line diagram to discuss the impact of the rising pork prices on the consumption choice between pork and chicken for a typical Chinese consumer. (8%) (b) Consider the chicken market, which is perfectly competitive. It was in its long-run equilibrium. Explain, with an aid of a diagram, how the increase in pork prices would affect the chicken market and individual chicken farmers in the short run? (10%) (c) However, industry experts suggested that the farmers were not optimistic about the chicken market because the costs are soaring for day-old chicks and feed also. It is because China relies on imported breeding stock for production, buy poultry imports from the U.S. and France have been banned in China since 2016 in the wake of a bird flu outbreak in those countries in December 2014. Explain, using a separate diagram from part (b), how the increase in costs for day-old chicks and feed would affect the chicken market and individual chicken farmers in the short run? (12%)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started