Consider a farmer that produces both white and brown rice. It is discovered that the demand for brown rice is relatively more inelastic compared to the demand for white rice. Initially the price of both white and brown rice is the same and the farmer produces the same quantity of white and brown rice. Now there is an improvement in agricultural technologies that affect both white and brown rice equally. Employ the demand and supply model to compare and contrast the effects on the equilibrium price and quantity of both white and brown rice from the technological improvement. Explain the effects on the farmer's revenue from both types of rice after the change in technology and support your answers with one suitable market diagram. In addition, discuss the situation where the improvement in technology may be detrimental to the producers. Please provide one suitable market diagram

Consider a farmer that produces both white and brown rice. It is discovered that the demand for brown rice is relatively more inelastic compared to the demand for white rice. Initially the price of both white and brown rice is the same and the farmer produces the same quantity of white and brown rice. Now there is an improvement in agricultural technologies that affect both white and brown rice equally. Employ the demand and supply model to compare and contrast the effects on the equilibrium price and quantity of both white and brown rice from the technological improvement. Explain the effects on the farmer's revenue from both types of rice after the change in technology and support your answers with one suitable market diagram. In addition, discuss the situation where the improvement in technology may be detrimental to the producers. Please provide one suitable market diagram

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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When an economist states the supply of a product has decreased, he or she has concluded that a) A smaller quantity will be produced at every price b) The price is too high for equilibrium c)a greater quanity will produced at every price d) the price is too low equilibrium. e) demand was too high for producers to make a profit.
Consider two markets: the market for coffee and the market for hot cocoa. The initial equilibrium for both markets is the same, the equilibrium price is $5.50, and the equilibrium quantity is 37.0. When the price is $8.75, the quantity supplied of coffee is 69.0 and the quantity supplied of hot cocoa is 101.0101.0. For simplicity of analysis, the demand for both goods is the same. Using the midpoint formula, calculate the elasticity of supply for hot cocoa. Please round to two decimal places.
Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in the market for the good? Answer A)Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. B)Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. C)Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. D)Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
The island nation of Coconutistan recently suffered an unfortunate accident which took its water treatment plant offline, leaving residents without clean water in their homes. The plant for bottling water was unaffected by the accident. The graph shows the supply and demand for bottled water before the accident. Assume that $6 is the maximum price for a case of bottled water according to the price gouging laws on the island. Shift one or more curves to show the effect of the accident on the market for bottled water. Price ($)Quantity of bottled water by the case01002003004005006007008009001,000012345678910SupplyDemandPrice ceiling What is the amount of the shortage after the accident? shortage:
Market in equilibrium: consider a market for electric vehicles (EVS), where the equilibrium price (P*) is $30,000 per vehicle, and the equilibrium quantity (Q*) is 10,000 vehicles per year. draw the initial supply and demand graph. P qor Q Events: Due to advancements in battery technology, the cost of producing EVs decreases significantly. Additionally, governments around the world introduce stricter regulations on emissions from gasoline-powered vehicles, leading to an increased demand for EVs. Explain how both the supply and demand curves would be affected. Draw the new supply and demand curves on your graph (in red) and predict the changes in equilibrium price and quantity. Demand: Supply: +
The following table models the supply and demand of a specialty coffee: Price per pound Pounds supplied (in thousands) Pounds demanded (in thousands) $8 8 16 $9 9 14 $10 11 11 $11 13 9 $12 16 7 Over time, the demand for this specialty coffee ebbs as competing coffees enter the market. As a result, the demand curve shifts down by five thousand pounds at all price points. What is the new equilibrium price per pound?
Suppose that the cost of crude oil decreases from $25 to $20 for each barrel of heating oil produced. Assuming that the rest of the determinants of supply and demand for heating oil remain equal to their initial values, the market will eventually reach a new equilibrium price of per barrel.
Sales of bananas have dropped from 100,000 pounds to 75,000 pounds per day because a freeze resulted in a smaller supply. In the process, the average price of a pound of bananas has risen from $0.80 to $1.00. Which of the following is most likely true? The demand for bananas has increased because of the increase in price.The demand for ice cream (used in banana splits) is likely to decrease.The price of tapes will rise about 25 percent.The total revenue (P times Q) from sales has risen.The quantity demanded of ice cream will increase. Flag this Question
Using the supply and demand functions below, derive the demand and supply curves if Y=$55,000 and pc=$13. What is the equilibrium price and quantity of coffee? Part 2 The demand function for coffee is Q=8.5−p+0.01Y, where Q is the quantity of coffee in millions of pounds per year, p is the price of coffee in dollars per pound, and Y is the average annual household income in high-income countries in thousands of dollars. The coffee supply function is Q=9.6+0.5p−0.2pc, where pc is the price of cocoa in dollars per pound. Part 3 The equilibrium price of coffee is p=$enter your response here per pound and the equilibrium quantity is Q=enter your response here millions of pounds per year. (Enter your responses rounded to two decimal places.)
Consider the market for sweet cherries in the Yakima Valley in Washington. The following are the equations of the supply and demand curves for sweet cherries in the Yakima Valley: Pd=452-Qd or Qd-452-Pd Ps=(1/450) * Qs+1 or Qs=450 * Ps-450=450 * (Ps-1) In these equations, P is the Price/lb of sweet cherries in the Yakima Valley, and Qd and Qs are the quantity demanded and the quantity supplied of cherries in milliion lbs per year. a) complete the table to find the Qd, Qs b) what are the equilibrium P and Q of cherries? c) Suppose that the P of sour cherries, a substitute of the sweet cherries, decreases. As a result the D curve for sweet cherries shifts, and the new D curve is given by the following equation: P=361.8-Qd or Qd-361.8-P Fill the Qd_d column of the table with your answers.
Consider two markets: the market for cat food and the market for dog food. The initial equilibrium for both markets is the same, the equilibrium price is $⁢3.50, and the equilibrium quantity is 31.0. When the price is $10.75, the quantity supplied of cat food is 75.0 and the quantity supplied of dog food is 103.0. For simplicity of analysis, the demand for both goods is the same. Using the midpoint formula, calculate the elasticity of supply for dog food. Please round to two decimal places.
The following graph shows the supply curve for sedans in an imaginary market. For simplicity, assume that all sedans are identical and sell for the same price. Two factors that affect the supply of sedans are the level of technical knowledge in this case, the speed with which manufacturing robots can fasten bolts, or robot speed-and the wage rate that auto manufacturers must pay their employees. Initially, the graph shows the supply curve when robots can fasten 2,500 bolts per hour and autoworkers earn $25 per hour. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Thousands of dollars) 50 40 30 20 O Supply 0 100 200 300 400 500 600 700 800 900 QUANTITY (Sedans per month) Graph Input Tool Supply for Sedans Price of a Sedan (Thousands of dollars) Quantity Supplied (Sedans…