Market price

This is the Critical AssignmentSmith owns orange orchards in California. Every year he harvests and sells his products in a market. In California, there are 40,000 orange farmers, and therefore Smith accounts for a tiny proportion of the total market size. This means he does not have any power to determine the market price of orange. Oranges produced in California are assumed to be fairly identical although there is a slight variation in taste, size, and quality, etc.This year (2015), Smith produced oranges significantly more compared to last year (2014). According to agricultural scientists and economists, it may be due to the fact that a number of kettle and livestock, owned by his neighbor, Jim, who crossed over the fence of orange orchards, increasing the amount of manure significantly in his orchards. It has been known that manure could serve as a valuable fertilizer since it provides many nutrients for crop and fruit production. However, too much manure can lead to nitrate leaching, accelerated level of eutrophication of lake and phosphors run-off, hurting the quality of local lakes, near which, approximately 100,000 million urban residents resides.While his orange production increased this year, Smith found that CA residents’ preference for oranges dramatically decreased as well. He hired a famous economist, Diana to find out how market equilibrium price and quantity of orange would change, which would be very informative for his production plan in the future. The next day, Diana informed Smith of her economic analysis in detail via his work email.Then, Smith made a phone call to ask Diana if increasing the market price of orange would boost his sales revenue this year. She responded by saying, “Hmmm, that is a good question, but it is hard to say with 100% certainty because it depends on the consumer’s responses to a change in the price of an orange”.At the end of year, he found his farm operation less profitable than expected.Hence, he put his farm up for sale and began to advertise the sale of his orchard online . A lot of potential buyers visited his orchards, and asked him a lot of questions regarding its quality, such as quality of soil, profitability, the type of fertilizer he uses, etc. Since those characteristics are not known to buyers, he tends not to reveal the full and correct information about his property, and potential buyers would end up buying that property at a higher price than the market price.QuestionsChoose four out of five questions below, and write an economic report using at least 1000 words. The essay will be graded based on grade rubric which you can find in week 8 learning activities. Also, make sure you include any references (including textbook) using the appropriate APA format. Make sure you provide biblical perspectives in your report.Discuss the type of market structure of a farm Smith is operatingDiscuss a negative and a positive externalities illustrated in the second paragraph of this article, and what types of economic problems will arise from them, and how can they be resolved using economic tools or policies?Based on the information, in the third paragraph, discuss the the change in market equilibrium price and quantity of orange, using the concept of supply & demandDiana advised Smith by saying, “it is hard to say with 100% certainty because it depends on consumer’s responses to a change in the price of an orange”. Discuss what that means, using the relationship between the change in total revenue and the change in the price. Please refer to pp. 163-164.In the last paragraph, discuss how one of the following two economic concepts (adverse selection vs moral hazard) is relevant (refer to chapter 8)Rubric Detail Levels of AchievementCriteria ExemplaryAccomplishedDevelopingBeginningDimension 1: Mastery Concepts and TheoriesCLO – 1.1, 1.2, 1.3, 1.4, 1.5, 1.6, 1.7, 1.8, 2.1, 2.2BSA SLO – 336 to 40 pointsDemonstrates mastery and accuracy of concepts, terms and theories selected by the student without error 32 to 35 pointsDemonstrates mastery and accuracy of most of the major concepts, terms, and theories with several errors 28 to 31 pointsDemonstrates moderate understanding of a few of the concepts, terms and theories, but lacks a mastery of the majority 0 to 27 pointsDemonstrates basic understanding of the concepts, terms, and theories, but lacks any mastery at allDimension 2: Critical ThinkingCLO – 2.1, 2.2, 3.2BSA SLO -336 to 40 pointsDevelops arguments, and claims, defended by concrete and accurate examples or evidence in a professional manner 32 to 35 pointsDevelops arguments, and claims, defended by fairly concrete, but accurate examples or evidence in a professional manner 28 to 31 pointsDevelops arguments, and claims, but defended by inappropriate examples or evidence 0 to 27 pointsArguments or claims are not supported by concrete examples or evidenceDimension 3: Quality of WritingCLO – 2.1, 2.2, 3.2BSA SLO – 318 to 20 pointsConfident, professional, and mature in structure, voice, and usage. Expert & accurate use of APA 16 to 17 pointsCompetent and proficient in structure, voice, and usage, but some minor issues. 14 to 15 pointsUnderstandable and adequate in structure, voice, and usage, but with some real issues. Too many APA concerns. 0 to 13 pointsChoppy structure, voice, and usage with serious communications issues. Little or no adherence to APADimension 4: Organization of ThoughtsCLO – 2.1, 2.2BSA SLO -327 to 30 pointsThe structure of content is strong and helps readers move through the text smoothly. The content contains effective transitions between paragraphs 24 to 26 pointsThe structure of content has a clear organizational structure, and helps readers to understand fairly easy, but slightly lacks effective transitions between paragraphs 21 to 23 pointsThe structure of content is understandable, but significantly lacks effective transitions between paragraphs 0 to 20 pointsThe content lacks coherence, and requires readers to reread substantial portionsView Associated Items