PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Chapter 3, Problem 5P
To determine

Relation between increasing birth rate and price of land.

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Between 1950 and 2020, the price of wheat fell dramatically from $20.23 per bushel to $4.85 per bushel. Suppose between 1950 and 2020, the supply of wheat increased substantially due to increases in productivity, shifting the wheat supply curve to the right. With this supply shift, the amount by which the price of wheat falls will be larger the more the demand for wheat. In addition, assume that between 1950 and 2020 the income of the average American increased substantially and that wheat is a normal good. With this increase in income, OA. the price of wheat will be unaffected. OB. the amount by which the price of wheat rises will be smaller the higher the income elasticity of wheat. C. the amount by which the price of wheat falls will be smaller the higher the income elasticity of wheat. OD. the amount by which the price of wheat rises will be smaller the lower the income elasticity of wheat. OE. the amount by which the price of wheat falls will be larger the higher the income…
Recently, the spot market price of U.S. hot rolled steel plummeted to $400 per ton. Just one year ago, this same ton of steel cost $700. According to Metals Monitor, the drop in price was due to falling oil prices, along with a rise in cheap imports and excess capacity. These dramatic market changes have greatly impacted the supply of raw steel. Suppose that last year the supply for raw steel was QS, raw = 600 +4P, but this year it has shifted to QS raw- = 4,200 +4P. Assuming the market for raw steel is competitive and that the current worldwide demand for steel is Qara raw 9,000 -8P, compute the equilibrium price and quantity for the steel market one year ago, and the equilibrium price-quantity combination for the current steel market. Instructions: Enter your responses as whole numbers. Price one year ago: $ Quantity one year ago: Price for current market: $ Quantity for current market: Suppose the cost function of a representative steel producer is C(Q) = 1,200 + -15Q². How much raw…
Frustrated with his Managerial Economics Grades, James decides to abandon his academic career and focus on business. He sets up a start-up business at City Market where he sells pre-packaged mealie meal packs (Pamela) as well as designer ladies's pants. At a price of K50 James manages to sell 50 pants every month, while 45 mealie meal packs are sold away every month at K60. His friend Bwalya takes advantage and ceases the opportunity to sell complementary ladies' bras in James' shop where at least 30 bras are sold away every month at K75 each. With a booming business, James' wife Sylvia advises him that he could actually increase his business sales by increasing both the price of pants and that of mealie meal packs to K75 respectively. James follows this proposal religiously, and the immediate observed effects of these price increases are reduction of monthly demand for the two goods to 30 and 40 units respectively. a) Calculate the price elasticities of demand for pants and mealie…
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