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Write a 4- to 5-page essay that addresses the following FOUR questions on the market for milk. (For this Case, keep it simple; don't worry about different brands, etc.) Explain what happens to price and quantity of milk when the following events occur (you do not need to analyze the event itself but rather determine the effect of the event on supply and demand of milk): A scientific study shows that consumption of milk is beneficial for healthy bones. There is an outbreak of mad cow disease. The price of almond milk decreases. In order to promote healthy families, a price ceiling on milk is implemented. Suppose Johnny drinks 4 cups of milk every day no matter what the price. What kind of elasticity does it have? Suppose that when the price of milk increases by 40%, the percentage change in quantity demanded by consumer is reduced by 10%. Calculate the elasticity. Based on your answer to Question 3, What happens to total revenue when the price of milk is increased. Why? Some helpful suggestions on completing the assignment: For each event, you must specify how it effects either demand, quantity demanded, supply, or quantity supplied. It is also important to demonstrate how the change will affect the market demand or supply curve. Also, be sure to state any assumption you are making regarding the relationship of the event and milk. Here is an example of the best way to answer question #1 above: Event: Price of cereal decreases. Assume that cereal is a complement for complement. If cereal is cheaper, then the consumer will increase quantity demanded of cereal. If consumers buy more cereal, then there will be an increased demand for milk because it is its complement. This event causes a shift of the demand curve to the right. The shift will cause price and quantity of milk to increase. Here is also some helpful information on how to address the elasticity questions: Inelastic goods (goods in which consumers are less responsive to changes in price): e < |-1| Elastic goods (goods in which consumers are more responsive to changes in price): e > |-1| In this course, we use the absolute value of elasticity. The price elasticity of demand is always calculated as a negative value due to the law of demand (inverse relationship between price and quantity). Assignment Expectations Use concepts from the modular background readings as well as any good-quality resources you can find. Be sure to cite all sources within the text and provide a reference list at the end of the paper. Length: 4-5 pages double-spaced and typed. The following items will be assessed in particular: Your ability to understand an application of supply and demand. Some in-text references to the modular background material (APA formatting not required). The essay should address each element of the assignment. Remember to support your answers with solid references including the Case readings.
What is the equivalent present value of the following series of payments: $7000 the first year, $6500 the second year, $6000 the third year, $5500 the fourth year, and $5000 the fifth year? The interest rate is 10%, compounded annually. Answer: $2..
At what level of employment would diminishing returns set in for the variable input?
This seems to have reversed itself somewhat in recent years. Illustrate what factors might have been at work.
What is the major problem in achieving an efficient use of the world’s water? If there were a global market in water, like there is in oil, how do you think the market would work?
Level of GDP per effective worker and explain whether this economy is following the Golden rule
Suppose that aggregate price level is constant, interest rate is fixed, and there are no taxes on foreign trade, how much will the aggregate demand curve shift and in what direction if the following events occur?
this table shows the short run production function for a competitive firm whos output sells for 20 a unit.l q0 01 22 63
Yesterday you were consuming 4 eggs and 2 strips of bacon. Today you are consuming 3 eggs and 3 strips of bacon. If you have the same taste what might have caused this change Are you better or worse off
Bright Flashlight Corporation requires $300,000 to take a cash discount of 2/10, net 70. A bank will loan the money for 60 days at a total interest cost of $5,500.
What is the impact of this on the revenues of the networks also why.
Simon purchases a bond, newly issued by Amalgamated Corporation, for $1000. The bond pays $60 to its holder at the end of the first and second years and pays $1,060 upon its maturity at the end of the third year. a, What are the principal amount,..
Describe the following from an economic perspective and give numerical examples:
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