INSTRUCTIONS: Graphs and diagrams should be cleared labeled $-$ all axes labeled, all lines and curves labeled, all points labeled $-$ to get full credit.

For each question, illustrate with a demand and supply diagram.

a$)$ Starting from an initial equilibrium in the market for large gas$-$guzzler cars, determine the effect on the equilibrium price and the equilibrium quantity of gas$-$guzzler cars, resulting from steep increases in price of gasoline.

b$)$ Starting from an initial equilibrium in the market for Lettuce, determine the effect on the equilibrium price and the equilibrium quantity of lettuce, resulting from EI Nino storms accompanied by heavy rains that destroys a significant portion of the lettuce crop.