Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman

Exercise 13

Consider the following passage from an article in the New York Times on March 9,2011,"In the last few years,coffee yields have plummeted here [Colombia] and in many of Latin America's other premier coffee regions as a result of rising temperatures and more intense and unpredictable rains,phenomena that many scientists link partly to global warming... [while] global demand is soaring as the rising middle classes of emerging economies like Brazil,India and China develop the coffee habit." Illustrate the impact of these events in a supply and demand diagram of the global market for coffee. Ceteris paribus ,can we determine the direction of change in equilibrium quantity? Of equilibrium price? Explain briefly.