Answer one of the following questions (answer either question A or B):
A. In 2014, Cinco de Mayo celebrations were affected by a rapid spike in the price of limes. This spike was caused by heavy rains late in 2013 coupled with an outbreak of a citrus-killing bacterium in the lime producing state of Colima. Mexican drug cartels operating in the same region only worsened the problem (click the link to watch NBC's Lime Prices Skyrocket Due to Weather, Drug Cartels video). Describe what you would observe in a supply-demand diagram that would cause the price of limes to rise. Also explain what must have happened to equilibrium quantity.
B. The following statement is from the New York Times article "As Biofuel Demand Grows, So Do Guatemala's Hunger Pangs" (January 5, 2013): "In a globalized world, the expansion of the biofuels industry has contributed to spikes in food prices and a shortage of land for food-based agriculture in poor corners of Asia, Africa and Latin America." Do you agree with this claim? Incorporating what you know about demand and supply, how do you think expansion of biofuels might affect the market for corn?