Exercise 2

In this exercise, we will analyze the supply curve in the market of tomatoes. In each question below, your task is to provide a graphical analysis accompanied by an explanation. Treat each question separately.

a) The cost of pesticide that tomato farmers use has significantly decreased. What is going to happen with the supply curve?

b) Looking for better opportunities abroad, 25% of labor working on the tomato farms emigrated to another country. What is going to happen with the supply curve?

c) According to the new law, tomato farmers must provide their workers with a safety training and equipment. At the same time, the wages in the tomato industry have decreased. What is going to happen with the supply curve?