QUESTION 2 Use the graph below for the cacao market to assist you in determining which of the following results is correct. S E P. Price per unit S Q Quantity per period Suppose one of the main cacao producing countries in the world has a failure of their crop resulting in a prolonged decline in world production. Further suppose that the cacao is the main ingredient in chocolates and there have been cases of chocolate causing allergic reactions in children, ceteris paribus. If the degree of change in demand is double the degree of change in supply, which of the following is correct?QUESTION 1 Use the graph below for the chicken market to assist you in determining which of the following results are correct. S D E Price per unit D S - - Q 0 Quantity per period Suppose the latest medical reports indicate that chicken is much healthier than beef. Further suppose that due to cheap feed for chickens, chicken production has increased. If the degree of change in demand is double the degree of change in supply, which of the following is correct? Oa. The supply curve will shift to the right as the supply of chicken increases The demand curve will shift to the right as the demand for chicken increasesQUESTION 3 Use the graph below for the potatoes market to assist you in determining which of the following results is correct. E P. Price per unit S 0 Quantity per period Cunneen the latest medical ronote indicate that the potassium in notatone is particularly unhealthy Further cunneen that win had good mine in South AfricaQuestion Completion Status: P D S P2 Price per unit P1 PO S D Q Qa Qb Qo Quantity per periodQuantity per period Suppose the latest medical reports indicate that chicken is much healthier than beef. Further suppose that due to cheap feed for chickens, chicken production has increased. If the degree of change in demand is double the degree of change in supply, which of the following is correct? O a. The supply curve will shift to the right as the supply of chicken increases The demand curve will shift to the right as the demand for chicken increases. The equilibrium price of chicken will increase while the equilibrium quantity increases. O b. The supply curve will shift to the right as the supply of chicken increases The demand curve will shift to the right as the demand for chicken increases The equilibrium price of chicken will drop while the equilibrium quantity increases O c. The supply curve will shift to the left as the supply of chicken decreases. The demand curve will shift to the left as the demand for chicken decreases The equilibrium price of chicken will decrease while the equilibrium quantity decreases The supply curve will shift to the left as the supply of chicken decreases The demand curve will shift to the left as the demand for chicken increases. The equilibrium price of chicken will increase while the equilibrium quantity decreasesQuestion Completion Status: O Q Quantity per period Suppose the latest medical reports indicate that the potassium in potatoes is particularly unhealthy. Further suppose that we had good rains in South Africa the following is correct? resulting in a record increase in potatoes harvested, ceteris paribus. If the degree of change in supply is double the degree of change in demand, which of O a. The supply curve will shift to the right as the supply of potatoes increases. The demand curve will shift to the left as the demand for potatoes decreases The equilibrium price of potatoes will drop while the equilibrium quantity decreases. O b. The supply curve will shift to the left as the supply of potatoes decreases The demand curve will shift to the right as the demand for potatoes increases The equilibrium price of potatoes will increase while the equilibrium quantity increases. O c. The supply curve will shift to the left as the supply of potatoes decreases The demand curve will shift to the right as the demand for potatoes increases The equilibrium price of potatoes will increase while the equilibrium quantity decreases. O d. The supply curve will shift to the right as the supply of potatoes increases The demand curve will shift to the left as the demand for potatoes decreasesSuppose one of the main cacao producing countries in the world has a failure of their crop resulting in a prolonged decline in world production. Further suppose that the cacao is the main ingredient in chocolates and there have been cases of chocolate causing allergic reactions in children, ceteris paribus. If the degree of change in demand is double the degree of change in supply, which of the following is correct? a. The supply curve will shift to the right as the supply of cacao increases. The demand curve will shift to the right as the demand for cacao increases. The equilibrium price of cacao will drop while the equilibrium quantity increases O b. The supply curve will shift to the right as the supply of cacao increases The demand curve will shift to the right as the demand for cacao increases. The equilibrium price of cacao will increase while the equilibrium quantity increases. O c. The supply curve will shift to the left as the supply of cacao decreases The demand curve will shift to the left as the demand for cacao decreases. The equilibrium price of cacao will increase while the equilibrium quantity decreases O d. The supply curve will shift to the left as the supply of cacao decreases The demand curve will shift to the left as the demand for cacao decreases The equilibrium price of cacao will decrease and the equilibrium quantity decreasesQUESTION 5 Suppose rent control is in force in a particular town, with the rent fixed at a level which is lower than the equilibrium rent. Which one of the following is likely to happen if rent control is abolished? The supply of housing will decrease. O The quantity of houses demanded will increase. O Rents will increase and the quantity of houses supplied will also increase. O Rents will decrease and the quantity of houses supplied will also decrease. QUESTION 6 If government sets a maximum price above the equilibrium price: O a surplus will develop. O a shortage will develop. the market will be unaffected.20 Price of beef D 10 S 0 Q 7 9 Quantity of beef (millions of kilograms) Assume a floor price has been set above the market clearing equilibrium price resulting in a surplus on the market (distance ab). Why would government introduce a floor price only to create a surplus on the market? O To provide farmers with a guaranteed price. O To stabilise fluctuating agricultural prices. O To protect smaller farming enterprises All of the above