Question 1 Suppose that bushfires in North-West Victoria destroys many of the citrus farms. As a result, the price of oranges rises from $0.40 to $0.80, the price of a tangelo rises from $1.20 to $2.00, and the price of limes rises from $0.50 to $0.90. Suppose the citrus market basket is composed of 100 oranges, 50 tangelos and 200 limes. Therefore, there has been an 80% increase in citrus price index and the average citrus consumer's cost of living has also increased by this amount. TRUE or FALSE (explain your answer showing appropriate calculations).
Question 1 Suppose that bushfires in North-West Victoria destroys many of the citrus farms. As a result, the price of oranges rises from $0.40 to $0.80, the price of a tangelo rises from $1.20 to $2.00, and the price of limes rises from $0.50 to $0.90. Suppose the citrus market basket is composed of 100 oranges, 50 tangelos and 200 limes. Therefore, there has been an 80% increase in citrus price index and the average citrus consumer's cost of living has also increased by this amount. TRUE or FALSE (explain your answer showing appropriate calculations).
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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i just need to know if its true or false for the 2 statments with a brief explanation thanks for help.
![Question 1
Suppose that bushfires in North-West Victoria destroys many of the citrus farms. As a result, the
price of oranges rises from $0.40 to $0.80, the price of a tangelo rises from $1.20 to $2.00, and the
price of limes rises from $0.50 to $0.90. Suppose the citrus market basket is composed of 100
oranges, 50 tangelos and 200 limes. Therefore, there has been an 80% increase in citrus price
index and the average citrus consumer's cost of living has also increased by this amount.
TRUE or FALSE (explain your answer showing appropriate calculations).
Question 2
MC
7
4
Demand
MR
3
4
Quantity
The model above shows the cost and revenue curves for a monopolist. This monopolist has zero
fixed costs and sufficient information to perfectly price discriminate. Therefore, the firm will
produce a quantity of goods that corresponds to where supply = demand and earn $21 in total
revenue. TRUE or FALSE (Provide an appropriate explanation).
Price, Costs $](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc91eb436-6202-4368-9458-806984f92c1b%2Fab1343f2-5457-4365-8182-50b4e562e318%2Fn7ujwy7_processed.png&w=3840&q=75)
Transcribed Image Text:Question 1
Suppose that bushfires in North-West Victoria destroys many of the citrus farms. As a result, the
price of oranges rises from $0.40 to $0.80, the price of a tangelo rises from $1.20 to $2.00, and the
price of limes rises from $0.50 to $0.90. Suppose the citrus market basket is composed of 100
oranges, 50 tangelos and 200 limes. Therefore, there has been an 80% increase in citrus price
index and the average citrus consumer's cost of living has also increased by this amount.
TRUE or FALSE (explain your answer showing appropriate calculations).
Question 2
MC
7
4
Demand
MR
3
4
Quantity
The model above shows the cost and revenue curves for a monopolist. This monopolist has zero
fixed costs and sufficient information to perfectly price discriminate. Therefore, the firm will
produce a quantity of goods that corresponds to where supply = demand and earn $21 in total
revenue. TRUE or FALSE (Provide an appropriate explanation).
Price, Costs $
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