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).
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter4: The Market Forces Of Supply And Demand
Section: Chapter Questions
Problem 4QR
Related questions
Question
i just need to know if its true or false for the 2 statments with a brief explanation thanks for help.

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 $
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you

Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning

Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax

Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning

Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning

Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax

Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning

Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning

Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
