Author Question: A severe freeze has once again damaged the Florida orange crop. The impact on the market for oranges ... (Read 196 times)

DyllonKazuo · **on:** Jun 30, 2018

A severe freeze has once again damaged the Florida orange crop. The impact on the market for oranges will be a leftward shift of:
a. the demand curve, as consumers try to economize because of the shortage.
b. the demand curve and a rightward shift of the supply curve.
c. the supply curve.
d. the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price.

Question 2

What role do imports play in aggregate demand? Under which conditions will changes in imports expand aggregate demand? Reduce aggregate demand?

Dunkey · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

c

Answer to Question 2

Global markets have become increasingly important not only here but abroad. A decrease in imports, other things being equal, will mean more of total purchases will be from domestic suppliers, net exports will rise and aggregate demand will also rise. An increase in imports, other things being equal, will mean fewer of total purchases will be from domestic suppliers, net exports will fall and aggregate demand will also fall.