1. In the United States, 2013 was a bad year for growing wheat. And as wheat supply decreased, the price of wheat rose dramatically, leading to a lower quantity demanded (a movement along the demand curve). The accompanying table describes what happened to prices and the quantity of wheat demanded. a. Using the midpoint method, calculate the price elasticity of demand for winter wheat. b. What is the total revenue for U.S. wheat farmers in 2012 and 2013? 2012 2013 Quantity demanded (billions of bushels) 2.2 Average price (per bushel) 2.0 $3.42 $4.26 c. Did the bad harvest increase or decrease the total revenue of U.S. wheat farmers? How could have predicted this from your answer to part a? you

1. In the United States, 2013 was a bad year for growing wheat. And as wheat supply decreased, the price of wheat rose dramatically, leading to a lower quantity demanded (a movement along the demand curve). The accompanying table describes what happened to prices and the quantity of wheat demanded. a. Using the midpoint method, calculate the price elasticity of demand for winter wheat. b. What is the total revenue for U.S. wheat farmers in 2012 and 2013? 2012 2013 Quantity demanded (billions of bushels) 2.2 Average price (per bushel) 2.0 $3.42 $4.26 c. Did the bad harvest increase or decrease the total revenue of U.S. wheat farmers? How could have predicted this from your answer to part a? you

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

100%

1. In the United States, 2013 was a
bad year for growing wheat. And
as wheat supply decreased, the
price of wheat rose dramatically,
leading to a lower quantity demanded (a movement along the demand curve). The accompanying
table describes what happened to prices and the quantity of wheat demanded.
a. Using the midpoint method, calculate the price elasticity of demand for winter wheat.
b. What is the total revenue for U.S. wheat farmers in 2012 and 2013?
c. Did the bad harvest increase or decrease the total revenue of U.S. wheat farmers? How could you
have predicted this from your answer to part a?
2012
2013
Quantity demanded (billions of bushels) 2.2
Average price (per bushel)
2.0
$3.42
$4.26

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