1. Evaluate this statement: "People engaged in economizing behavior will always buy the lowest priced item they can find."(5 Marks)
2. A terrible storm wipes out 70 percent of the peanut crop. Explain and show graphically, using comparative statics, how this will affect the market for peanut butter.( 6 mks)
3. Given the scenario in part b and the assumption that peanut butter and jelly are complements, explain and the effect that this supply shock will have on the market for jelly.(4 Marks)