(a)
With reference to the extract and Fig. 1.1, explain the change in the price of natural vanilla using supply and demand diagrams
- during 2004 to 2009 [3]
- through 2015 to 2018. [3]
(b)
Ice cream producers can use either natural vanilla or vanillin to make ice cream.
- State the concept that an economist would use to measure how responsive the demand for natural vanilla is to a change in the price of vanillin. [1]
- Explain the figure you would expect for this measurement. [3]
(c)[4]
Explain why the price elasticity of supply of ice cream made with vanillin is likely to be relatively more elastic than the price elasticity of supply of ice cream made with natural vanilla.
(d)[6]
Discuss whether the recent rise in the price of vanilla is, on balance, likely to have a positive or negative effect on Madagascar’s economy.