Question

Australian bees are currently the only ones in the world not infected with the Varroa Mite. The Varroa Mite is a parasitic mite capable of destroying an entire bee colony. Answer the following questions:

a. If the Australian bee population were to become infected with the Varroa Mite, what would be the resulting impact on the honey supply curve? L Type U for unknown, L for shift left, R for shift right, N for no effect
b. In 2015, an Australian father and son invented "Flow", a specifically designed beehive that enables simpler and faster honey extraction (using a tap instead of unpacking the whole hive). What would be the resulting market price for honey if the Flow invention is used throughout hives during 2015 and it is assumed Varroa Mites infest Australian hives in 2015. This new market price should be compared to a market equilibrium price before these two events occurred? H Type H for higher, S for the same, L for lower, U for unknown.
c. If the effect of the Varroa Mite severely impacted honey production but only a few beekeepers take up "Flow", what would be the impact on the resulting new equilibrium quantity of honey produced (compared to the original quantity before "Flow")? Type H for higher, S for the same, L for lower, U for unknown.

Answer 1

The Varroa Mite infestation would result in a leftward shift of the honey supply curve, increasing the market price of honey. However, the use of the Flow invention would also impact the market price, potentially increasing it further. If only a few beekeepers adopt the Flow invention, the new equilibrium quantity of honey produced would be lower than before the invention.

Step-by-step explanation:

a. The impact of the Varroa Mite infestation on the honey supply curve would result in a leftward shift, represented by the letter L, indicating a decrease in the quantity of honey supplied. This is because the Varroa Mite would lead to a decrease in the number of healthy bees available for honey production.

b. If the Flow invention is used throughout hives during 2015 and the Australian bee population becomes infected with the Varroa Mite, the resulting market price for honey would be higher than the market equilibrium price before these events occurred. This is because the Varroa Mite infestation would decrease honey production, while the Flow invention would make honey extraction simpler and faster, increasing the demand for honey and driving up the price.

c. If the Varroa Mite severely impacted honey production but only a few beekeepers take up the Flow invention, the resulting new equilibrium quantity of honey produced would be lower than the original quantity before the Flow invention. This is because the Varroa Mite would decrease honey production overall, while a few beekeepers adopting the Flow invention would not be able to offset the overall decrease in honey production.