You are watching a national news broadcast. It is reported that a typhoon is heading for the Washington coast and that it will likely destroy much of this year’s apple crop. Your roommate says, “This is not going to affect me, I don’t eat apples, I only drink pineapple smoothies.”
As an eager microeconomics student, what’s your response going to be?
In your answer, address how the typhoon will affect the market for apples (10 points), and how it will affect the market of pineapples (10 points), and the market for pineapple smoothies (10 points). In your analysis, you may consider apples and pineapples as substitutes. You may also consider that your roommate buys pineapple smoothies.