Recall the Application about the price of vanilla beans to answer the following question(s). In 2000, a
cyclone destroyed the vanilla bean crop in Madagascar, the worldʹs leading vanilla producer, and the
replacement vines took 3 to 5 years to produce usable beans. By 2006, the replanted vines in Madagascar
started to produce vanilla beans, but by that time several other countries had also entered the vanilla
market. The price of vanilla beans went from $50 per kilo to $500 per kilo from 2000 to 2003, and from
$500 per kilo to $25 per kilo from 2003 to 2006.
-According to this Application, from 2000 to 2003, the price of vanilla beans increased because the _______ curve shifted _______.

Question

Quizplus · Accepted Answer

The price increase from 2000 to 2003 was due to a supply shock caused by the cyclone, which destroyed the crop, shifting the supply curve up and to the left, indicating a decrease in supply.

Recall the Application About the Price of Vanilla Beans to Answer