Question

1. How does a market reach its equilibrium? What will happen if the market is not at the equilibrium and how to achieve the equilibrium back? (Based on the key terms: equilibrium price, equilibrium quantity, surplus and shortage).

Question 2. What can cause a movement along a fixed demand curve and what causes shifts in the demand curve? (Based on key terms: determinants of demand).

Question 3. What is the relationship between apple juice and orange juice? (hint: substitute or complements). If the price of apple juice increases, then what will happen in the market of orange juice and in the market for apple juice itself? (hint: refer to the difference between quantity demanded and demand and shifts and movement).

Question 4. Based on hypothetical scenarios: A recent study claimed that eating bananas improves cardio health. In yet another situation good weather increased the production of bananas. Based on these scenarios, analyze the impact this situation will have in the bananas market? (hint: refer to the changes in the equilibrium).

Answer 1