What percentage would the quantity demanded of corn decrease

Assignment Help Business Economics
Reference no: EM131118832

Suppose that corn currently costs $4.00 per bushel and that wheat currently costs $3.00 per bushel. Also assume that the price elasticity of corn is 0.15, while the price elasticity of wheat is 0.20. For the following questions about elasticities, simply use the percentage changes that are provided rather than attempting to calculate those percentage changes yourself using the midpoint formula.

Instructions: In parts a and b, round your answers to 2 decimal places. In part c, round your answers to 1 decimal place.

a. If the price of corn fell by 25 percent to $3.00 per bushel, by what percentage would the quantity demanded of corn increase? percentage?

What if the price of corn fell by 50 percent to $2.00 per bushels? percentage?

b. To what value would the price of wheat have to fall to induce consumers to increase their purchases of wheat by 5 percent? $ per bushel.

c. If the government imposes a per-bushel tax on corn of $0.40 so that the price of corn rises by 10 percent to $4.40 per bushel, by what percentage would the quantity demanded of corn decrease? percentage?

If the initial quantity demanded is 10 billion bushels per year, by how many bushels would the quantity demanded decrease in response to this tax? million bushels.

Reference no: EM131118832

A natural gas well is projected to produce

A natural gas well is projected to produce $200,000 in profit during its first year of operation, $190,000 the second year, $180,000 the third year, and so on, continuing this

Spent traveling on vacation domestically

Jane receives utility from days spent traveling on vacation domestically(D) and days spent traveling on vacation in a foreign country(F), as given by the utility function Up

Sophisticated about her time-inconsistency

Your friend needs to write a massive term paper over the next three weeks, but the NBA playoffs are heating up. If she concentrates, she can write the term paper in a week. Su

Plaintiff shipped to defendant-risk of loss

Plaintiff shipped to Defendant—Pizza Pride Inc. of Jamestown, North Carolina—an order of mozzarella cheese totaling $11,000. Plaintiff, a manufacturer of men’s clothing in Los

Judge regarding extraterritoriality

You are a lawyer working with the International Court of Justice in The Hague in the Netherlands. Your task is to review a recent decision by a U.S. judge regarding extraterri

Affect aggregate output and the price level

Using aggregate supply and aggregate demand analysis, discuss how the following will two events affect the aggregate level of output and the price level in the economy. Use ju

What quantity does each firm produce

Firms are competing in the DVD rental market, they have a symmetric inverse demand P=310-Q (N-firm model). Marginal cost for each is $30. What quantity does each firm produce?

How much should the initial deposit be

A couple just welcomed the birth of their new child and decides to set up a an interest-bearing account for the child’s college tuition. They hope to save $100,000 by the time

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd