Question
In the following policy scenarios, explain how the policy described might cause a shift of either the supply and/or the demand curve in a particular
In the following policy scenarios, explain how the policy described might cause a shift of either the supply and/or the demand curve in a particular market and what effect this would have on the price and/or the quantity in that market. Use a graph to illustrate your answer. Restrict your answers to an analysis of markets in the short-run and assume 'average' looking supply and demand curves in all cases. Write your answer and draw your graph in the space provided.
1. The federal government offers a tax credit that compensate families for part of the college tuition they pay for family members attending college. What is the effect of this policy on the market for college entrances?
2. The USDA is now urging Americans to limit their consumption of added sugar, citing the many negative health consequences of excess sugar consumption. What is the impact on the market for sugar?
3. New restrictions on the use of certain pesticides in the U.S. have limited the size of the domestic apple crop in recent years. What has been the impact on the market for bananas in the U.S.? (Assume that apples and bananas are substitutes.)
4. Health and safety requirements in the city of Eugene require each restaurant in city limits to have an additional employee in the kitchen dedicated to overseeing sanitation at all times. What is the effect on the market for restaurant meals?
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