Answered: Tornado Bulbul hits Bangladesh and…

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 7PA

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Question

Tornado Bulbul hits Bangladesh and affects the crops and fish hatcheries in the coastal areas.
What will happen to shrimp production if the hatcheries were affected due to the tornado? How
will it affect the equilibrium price and quantity of the local shrimp market? On the other hand, if a
neighboring country, who exports crops and fishes to Bangladesh, experiences a bumper harvest
and export their surplus products to us, say shrimp, what will happen to the equilibrium price and
quantity of local shrimp market again in Bangladesh? Draw a diagram and explain your answer.

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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