Question: 2. On a dr'rent single page, carefully plot both countries' supply and demand curves for oranges, side by side, based on the information in Table


2. On a dr'rent single page, carefully plot both countries' supply and demand curves for oranges, side by side, based on the information in Table 1. More specic instructions: Draw one diagram with the supply and demand curve for Egypt, and one diagram with the supply and demand curve for Israel. Align them side by side on a full page, with the axes measured in the same scale in the two countries. Suggestion: plot the curves for values of (Po / Pc) between 0 and 2 in increments of 0.25 or 0.5. Don't forget to put (Po / PC) on the vertical axis. As discussed in class, the demand equations in each country take account of the effects of relative price changes on a country's income through international trading (the \"income\" effect), as well as the substitution effect. The demand equation for Israel has a positive slope, so we're assuming that the income effect for oranges dominates the substitution effect in Israel, for all relative prices that might be possible after trade. For Egypt, the two effects both ensure that the demand curve for oranges must have a negative slope
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