Instructions:

In each problem, you must explain the scenario's effect on the market. If the quantity supplied or the quantity demanded changes, state how (increase or decrease). If instead, the scenario meets one of the criteria above, indicating there is a shift. If one of the curves shifts, state why and the direction it shifts (left or right). You should then state the effect on price (increase or decrease).

Example problem:

The first lady declares war on sweets in America. You make doughnuts.

The first lady's opinion is valued and will cause a preference change. This preference change will shift the demand curve to the right. This decreases demand and decreases price.

1.The price of corn goes up. You normally plant soybeans.