Answer to Question #311311 in Economics for Anonymous

Question

You love peanut butter. You hear on the news that 50 percent of the peanut crop in the Northern Cape has been wiped out by drought, and that this will cause the price of peanuts to double by the end of the year. As a result,

1.your demand for peanut butter will increase, but not until the end of the year.

2.your demand for peanut butter decreases as you look for a substitute good.

3.your demand for peanut butter increases today.

4.you will wait for the price of apricot jam to change before altering your demand for peanut butter.

Answer 1

3.your demand for peanut butter increases today.