**Ques 2.**The domestic demand for wheat is $ Q_{DD} = 1000 - 25P $, and the export demand is $ Q_{DE} = 500 - 25P $. Draw the domestic, export, and aggregate demand curves for wheat. Label the intercepts and the kink point.**Ques 3.**Let's say John allocates his income amounting to $240 between sushi and canned tuna. Let the unit price of sushi be $20 and the unit price of canned tuna be $12.a) Draw the budget line. b) Now suppose the price of canned tuna decreases to $6. Draw the new budget line. c) Draw two indifference curves. The first should be tangent to the old budget line and the second should be tangent to the new budget line. Tangency points represent the two points of consumption for John where utility is maximized before and after the price change, such that canned tuna is an inferior but not a Giffen good. In the figure, show the income, substitution, and total effects.

The total demand is calculated by adding the individual demand curves horizontally. Here, the demand…

Answered: The domestic demand for wheat is C e…

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The domestic demand for wheat is C e export demand is QDE=500-2 Draw the domestic, export, and aggr

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

**Ques 2.**

The domestic demand for wheat is $ Q_{DD} = 1000 - 25P $, and the export demand is $ Q_{DE} = 500 - 25P $. Draw the domestic, export, and aggregate demand curves for wheat. Label the intercepts and the kink point.

**Ques 3.**

Let's say John allocates his income amounting to $240 between sushi and canned tuna. Let the unit price of sushi be $20 and the unit price of canned tuna be $12.

a) Draw the budget line.
b) Now suppose the price of canned tuna decreases to $6. Draw the new budget line.
c) Draw two indifference curves. The first should be tangent to the old budget line and the second should be tangent to the new budget line. Tangency points represent the two points of consumption for John where utility is maximized before and after the price change, such that canned tuna is an inferior but not a Giffen good. In the figure, show the income, substitution, and total effects.

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