Q4

A. A hurricane in South Carolina damages the cotton crop.

With less supply of cotton for making clothes, supply of sweatshirts will decrease and supply
curve will shift to the left.

B .The price of leather jackets falls.Sweatshirts and leather jackets are substitute. With the
falling of the price of leather jackets, people tend to buy more leather jacket and fewer
sweatshirts. Therefore the demand of sweatshirt decrease and demand curve shift to the left.
C .All colleges require morning exercise in appropriate attire.
Since all colleges are required morning exercise in appropriate attire, demand of sweatshirt will
increase in which it shift the demand curve to the right.d.New knitting machines are
invented.With new knitting machines invented, more sweatshirts can be produced within the
same period of time, in which the supply increase and supply curve shift to the right.11. Consider
the following events: Scientists reveal that consumption of oranges decreases the risk of diabetes,
and at the same time, farmers use a new fertilizer that makes orange trees more productive.
Illustrate and explain what effect these changes have on the equilibrium price and quantity of
oranges.Since scientists reveal that consumption of oranges decrease the risk of diabetes, people
will buy more orange in order to prevent the diseases. With more people buying oranges,
demand of oranges will increase.As farmers use a new fertilizer that makes orange trees more
productive, more orange will be available in the market and supply of oranges will increase.
However, for equilibrium price, it depends on whether the increase in demand or supply is
higher.