Economics, 3rd Edition

Questions

1 

To what extent would you say 

that the market for cotton was an 

example of perfect competition? 

Explain.

2 

What makes up the market for 

cotton?

3 

What signal did price send to 

cotton growers following the 

rise in cotton prices in the first 

quarter of 2011? How might 

farmers respond to this sig-

nal and what effect might this 

have on the future price of cot-

ton? Explain your answer using 

appropriate demand and supply 

diagrams.

4 

In the article, the principle of 

ceteris paribus was implied; 

what do you think was assumed 

to be held constant? Is this a 

reasonable assumption to make 

in this instance? Explain.

5 

If data are collected which sug-

gests that the amount of land in 

cotton-growing regions of the 

world devoted to cotton does 

not change significantly in the