another question, preparing for the test ^_^?

Question

True or False: If a disease kills a large number of turkeys, the supply of turkeys will decrease. This will result in a price increase, which will then cause the supply of turkeys to increase.
a. True
b. False

Suppose that a cold snap hits Florida, destroying a signi¯cant fraction of the citrus crop. Suppose further
that scientists discover that drinking orange juice may reduce the incidence of cancer. In response to
these events,
a. the equilibrium price and quantity of orange juice are both predicted to fall.
b. the equilibrium price and quantity of orange juice are both predicted to rise.
c. the equilibrium price of orange juice is predicted to rise and the equilibrium quantity of orange
juice is indeterminate.
d. the equilibrium price of

Answer 1

Less turkeys means an increase in price and, obviously, a decrease in supply of turkeys. The increase in price will push for an increase in turkey supply. The question does not say that the increase in supply is immediate. I agree with Miss sez81 that, given the product, the supply reaction will be slow, but IT WILL COME. So I would say it is true.

The orange juice question has two competing reactions. The freeze will reduce the supply of OJ, increasing prices and reducing demand. However, the news that OJ reduces cancer risk will increase demand for OJ.
The competing reactions will result in an increase in prices and an indeterminate volume of demand of OJ (dependent on price elasticity of OJ)

Answer 2

1.The disease will cause turkey supply to decrease, and eventually demand will exceed supply. In response, the supplier will increase prices to curb the demand, but I doubt if whether the turkey farm can breed new batches of turkey fast enough in such time period to increase supply again?Compared to another good which is mass-produced in one day, it all depends on advance of genetic engineering technology on how long the supply of turkey may reach full capacity.My rational decison will suggest:
answer b.false (supply will not increase soon after price rise)

2. Answer c
The demand curve will shift left as demand increases to enjoy the benefits of orange juice-With the bad harvest, prices would rise to reduce demand. Equilibrium price will increase, but supply is undertermined because the farm has to recover from the loss

Answer 3

1. False - The increase in price will decrease demand
2. C. The price will rise and the quantity is inditerminate