1. Suppose that incomes have fallen on average, and that the state of Florida had an extremely favorable growing season for its orange crop. How would we expect that this will affect the supply curve and why? (The supply curve can remain static, the supply curve can shift to the left, we do not have enough information to say, or the supply curve will shift to the right)
2. What would we expect to happen to the demand curve and why?
The demand curve will shift to the left, as lower incomes will reduce the amount of oranges that consumers are able to purchase. The favorable growing season will increase the supply of oranges, but the lower incomes will reduce the demand for oranges, resulting in a shift to the left in the demand curve.
