Question

What would happen to the equilibrium price and quantity for automobiles if a war shut down production of several automotive companies in the region? Explain and illustrate with a correctly-labeled graph.

A false rumor that a precious metal necessary to make smartphones will soon be in desperately-short supply spreads among consumers. How will this affect the smartphone market? Explain and illustrate with a correctly-labeled graph.

A fungus wipes out a significant percentage of tomato crops worldwide. How might this affect the market for spaghetti noodles? Explain and illustrate with a correctly-labeled graph. (Note: Tomatoes are the chief ingredient in spaghetti sauce.)

With brick-and-mortar toy stores closing, board game manufacturers expect to have trouble finding as many consumers interested in their games. How will this affect the market for board games? Explain and illustrate with a correctly-labeled graph.

The lyrics of what proves to be the most popular song of the year mention a previously-obscure brand of jewelry. How would this affect the market for this brand? Explain and illustrate with a correctly-labeled graph.

How would a severe shortage of the phosphate necessary for fertilizer affect the market for produce (fruits and vegetables)? Explain and illustrate with a correctly-labeled graph.

If an online video streaming service significantly increased the cost of its monthly subscription rate, how would this affect the demand for its service? Explain and illustrate with a correctly-labeled graph.

Answer 1

1. This would cause firms in the automotive industry to rapidly decrease and the supply curve would shift left from S to S1, causing the equilibrium price to increase and equilibrium quantity to decrease.

So the new equilibrium price increases from P1 to P1 and Quantity falls from Q to Q1

2. This rumor will cause demand to shift right ( from D1 to D2), since consumers are trying to purchase smartphones before the price increases, which would increase demand causing equilibrium price and equilibrium quantity to increase.

Equilibrium price increases from P1 to P2 and equilibrium quantity fro Q1 to Q2.

3) A fungus wipes out a significant percentage of tomato crops worldwide so the supply of tomatoes falls and prices of tomato rises, as tomatoes are the chief ingredient in spaghetti sauce, the cost of input of spaghetti sauce rises which lead to shift the supply curve of sauce to the left leads to equilibrium price to increase and equilibrium quantity to decrease.

4) As board game manufacturers expect to have trouble finding as many consumers interested in their games, they would reduce the production so the supply of board game falls ( mean supply shift to the left) causing equilibrium price to increase and equilibrium quantity to decrease.

**First four questions are fully answered, please post the other parts separately**