ECO100 Principles of Economics Management - Assessment Task 3

Assessment 3: Individual Work

Question No. 1

1. Draw a graph of the market for banana. What are the equilibrium price and quantity? Explain why. (14 marks)
2. If the price of banana was $1.50 a box. What would be the situalon in the banana market (shortage or surplus)? Explain why and how the price and quantity would adjtust. (6 marks)
3. Suppose a cyclone destroyed some banana farms in QLD and the quantity of banana supplied decreased by 500 boxes a week at each price. Explain what would happen to the market supply and demand and how would the equilibrium price and quantity adjust? illustrate the changes on Your graph. (10 marks)
4. Suppose a cyclone decreased banana supply by 500 boxes a week at each price. But at the same time the demand for banana increased by 500 boxes a week at each price. Explain what would happen to the market equilibrium price and quantity? Illustrate the changes on your graph (10 marks)