Answer questions. The legalization of marijuana Gasoline market etc.

Please read questions and answer them, if graph needed please draw graph

ECONOMICS 1150       ASSIGNMENT #2

Answer the following 5 questions.  Each question will be graded out of 10 so that the entire assignment will be graded out of 50. This assignment can be completed in a group of two members. This assignment is due at the beginning of class on October 11, 2019.  Be sure to explain your answers fully using the tools of economic analysis. 

1. Suppose that as a result of increased tensions in the Middle East, oil production is down by 1.21 million barrels per day—a 5 percent reduction in the world’s supply of crude oil. Explain the likely impact of this event on the market for gasoline and the market for small cars.

1. a)  The following quote has been taken from the Denver Post newspaper: “Due to the legalization of marijuana in Colorado, it has been reported that business is booming in the pizza market.”  Use the tools of supply and demand analysis to explain what is going on in the pizza market.

b)                  Consider the following quote from the Globe & Mail: “Housing prices in

Vancouver have been falling in the last year due to government policies making it more difficult to obtain mortgages and policies which have discouraged foreign buyers from entering the B.C. housing market.”  Use the tools of supply and demand analysis to explain what is going on in the housing market.

1.  The Canadian government maintains price controls on many agricultural goods, including wheat and corn, two grain products produced by farmers in Canada. The resulting prices are higher than what would prevail in a free market.

1. Explain clearly why we have surpluses in these goods.

Suppose the government eliminated price supports for corn, but maintained them for wheat. What would happen to the prices of these goods, the quantities consumed by consumers of each good, and the size of the wheat surplus?