Essay
Almonds and walnuts are substitutes. Suppose the world demand for walnuts increases.
a. Using partial equilibrium analysis, predict what happens to the equilibrium price and quantity of almonds.
b. Using general equilibrium analysis, explain how the feedback between the markets affects the almond market. Does general equilibrium analysis predict a larger or smaller effect on the equilibrium price and quantity of almonds than partial equilibrium analysis?
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a. The demand curve for almonds shifts r...View Answer
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Correct Answer:
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