Problem 3: The following is an excerpt from an article published on October 9, 2015by the Wall Street Journal (the whole article is available as a separate document under the assignment folder): The U.S. Department of Agriculture, in a monthly report Friday, pegged corn output this autumn at 13.555 billion bushels on yields of 168 bushels an acre, topping analyst estimates for 13.461 billion bushels on yields of 166.4 bushels an acre. The government's yield forecast would mark the second highest behind last year's record 171 bushels per acre. Analysts expected the USDA to trim its yield forecast because of rainy weather early in the growing season in the eastern Midwest, which drew off nutrients from the soil and impeded some plant growth. But the government projected huge yields in the western Midwest, including Iowa, Minnesota and Nebraska. If there is one thing the report showed, it is "there's no shortage of grain in the U.S. or the world," said Don Roose, president of U.S. Commodities, a brokerage in West Des Moines, Iowa. The government in September had estimated that the U.S., the world's largest corn producer and exporter, would harvest 13.585 billion bushels on yields of 167.5bushels an acre. Corn futures for December delivery fell 8 ½ cents, or 2.2%, to $3.82 ¾a bushel at the Chicago Board of Trade, the lowest settlement price since Sept. 24. Your acquaintance who is Stuart School of Business alumni and is working at the Chicago Mercantile Exchange, has asked if you have a rough idea of the elasticity of demand for corn. What would your answer be?
Problem 3: The following is an excerpt from an article published on October 9, 2015by the Wall Street Journal (the whole article is available as a separate document under the assignment folder): The U.S. Department of Agriculture, in a monthly report Friday, pegged corn output this autumn at 13.555 billion bushels on yields of 168 bushels an acre, topping analyst estimates for 13.461 billion bushels on yields of 166.4 bushels an acre. The government's yield forecast would mark the second highest behind last year's record 171 bushels per acre. Analysts expected the USDA to trim its yield forecast because of rainy weather early in the growing season in the eastern Midwest, which drew off nutrients from the soil and impeded some plant growth. But the government projected huge yields in the western Midwest, including Iowa, Minnesota and Nebraska. If there is one thing the report showed, it is "there's no shortage of grain in the U.S. or the world," said Don Roose, president of U.S. Commodities, a brokerage in West Des Moines, Iowa. The government in September had estimated that the U.S., the world's largest corn producer and exporter, would harvest 13.585 billion bushels on yields of 167.5bushels an acre. Corn futures for December delivery fell 8 ½ cents, or 2.2%, to $3.82 ¾a bushel at the Chicago Board of Trade, the lowest settlement price since Sept. 24. Your acquaintance who is Stuart School of Business alumni and is working at the Chicago Mercantile Exchange, has asked if you have a rough idea of the elasticity of demand for corn. What would your answer be?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Problem 3:
The following is an excerpt from an article published on October
9, 2015by the Wall Street Journal (the whole article is available
as a separate document under the assignment folder): The U.S.
Department of Agriculture, in a monthly report Friday, pegged
corn output this autumn at 13.555 billion bushels on yields of
168 bushels an acre, topping analyst estimates for 13.461 billion
bushels on yields of 166.4 bushels an acre. The government's
yield forecast would mark the second highest behind last year's
record 171 bushels per acre. Analysts expected the USDA to
trim its yield forecast because of rainy weather early in the
growing season in the eastern Midwest, which drew off nutrients
from the soil and impeded some plant growth. But the
government projected huge yields in the western Midwest,
including Iowa, Minnesota and Nebraska. If there is one thing
the report showed, it is "there's no shortage of grain in the U.S.
or the world," said Don Roose, president of U.S. Commodities,
a brokerage in West Des Moines, Iowa. The government in
September had estimated that the U.S., the world's largest corn
producer and exporter, would harvest 13.585 billion bushels on
yields of 167.5bushels an acre. Corn futures for December
delivery fell 8 ½ cents, or 2.2%, to $3.82 ¾a bushel at the
Chicago Board of Trade, the lowest settlement price since Sept.
24. Your acquaintance who is Stuart School of Business alumni
and is working at the Chicago Mercantile Exchange, has asked if
you have a rough idea of the elasticity of demand for corn. What
would your answer be?
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