Macroeconomics 11th Edition by Michael Parkin

Exercise 1

After you have studied Reading Between the Lines on pp. 72-73, answer the following questions.
a. What happened to the price of peanut butter in 2011?
b. What substitutions do you expect might have been made to decrease the quantity of peanut butter demanded
c. What is the main complement of peanut butter and what do you predict happened in its market in 2011
d. What is one of the main substitutes in production for peanuts and what do you predict happened in its market in 2011
e. Do you predict that the higher prices of peanuts and peanut butter will persist or will they return to normal after one year
f. Why did the percentage rise in the price of peanuts exceed the percentage rise in the price of peanut butter