Reference no: EM132649636

Problem 1: For each of the situations below, consider the market indicated and draw the picture showing any shifts in the supply and/or demand curves and indicate what will happen to the market price and market quantity in the new short-run equilibrium.

1. The market for bicycles. A new medical study is widely released showing gigantic medical benefits coming from bicycling.
2. The olive oil market. Very dry weather in the Andalusia region of Spain ravages all of the olive trees there. (This is the region where many of the olives used to make olive oil for the world are grown.) 
3. The market for workers who install solar panels on houses. The US President recently introduced a tariff on all imported solar panels. This will raise the price of solar panels in the US. 
4. The market for hazelnuts. A key ingredient of Nutella is hazelnuts which are grown mostly around the Black Sea in Turkey. Nutella uses about a quarter of the world crop. Recently Nutella has becoming more popular worldwide while at the same time a frost destroyed much of this season's crop. 
5. The market for business process consulting. In this market consulting firms provide advice and services to companies wishing to streamline their operations. Suppose that a new process optimization program has recently been released, many companies wish to use it to streamline their operations, but need helping implementing the software. At the same time improving telecommunications technology has made it easier and cheaper for consultants to work remotely and has lowered the costs of providing advice to clients.