Knowledge Problem

California Freeze Drives Up Citrus Prices

Lynne Kiesling

OK, all of you who are teaching principles of economics right now, I hope you are paying attention to this incredibly timely unanticipated freeze in the Central Valley in California. This is a great classroom example of a leftward shift of a supply curve due to an exogenous weather event, and the consequent increase in price, just like the model suggests would happen.