.1. Consider a market for apples. Suppose that a new disease that kills apple trees appears. Illustrate this event on a supply and demand graph? Which curve moves? What happens to price and quantity?
2. Maria rents on a month-to-month basis an apartment that she can barely afford, in a market where apartments are hard to find. Her landlord announces that she is doubling the rent, effective immediately. What is likely to be Maria’s short-run response (say, over the next few days or weeks)? What might be her likely long-run response (over the next few months)?