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  • Supply and Demand

Click to read the article below and then answer the questions:

Wall Street turns to ‘solar grazing’ sheep in its push to go green

  • How has solar demand affected demand for sheep? 

  • Graph the market for sheep. Show the change identified in the previous question on the graph. What happens to the equilibrium price and quantity of sheep? Why?

  • Identify any externalities mentioned in the article. Are these externalities over or undersupplied? 

  • Is the relationship between the sheep and solar farmers consistent with the predictions of the Coase theorem? Why or why not?

Ariel Slonim at MRU Econinbox

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