5. There are two industries in a circular city. Each industry produces a good forexport and the export point is the center of the city. The price at the point ofexport is $15 per unit for the first good and $15 per unit for the second good.Transportation costs within the city are 50 cents per mile per unit for the firstgood, and 75 cents per mile per unit for the second good. Other costs (labor andcapital) are $8 per unit for the first good and $6 per unit for the second good.Firms produce 60 units of the first good and 80 units of the second good per unitof land. The land market is perfectly competitive, which implies that the users ofland bid enough to reduce their economic profits to zero. The agricultural bidrent is $30 at all locations.a. Find the bid rent curves for the two industries that correspond to zeroeconomic profits.b. Where do the first and second industries locate in the city? Show on a graph.

Given, Rent is defined as a surplus which results from advantages such as capitalization. It…

Answered: There are two industries in a circular…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Supply chain shortages have limited the number of microchips available to car manufacturers in the US. Since every new car needs microchips to control it, we can think of a limit on the number of microchips as a quota on the production of new cars. If this quota is binding, which of the following may be a market consequence of a production quota on new cars in the US market? Do not worry about the underlying facts; only whether the explanations make economic sense given our model. (Select one or more) (a) The quantity supplied of new cars will rise to meet the quota. (b) The quantity supplied of new cars will fall to meet the quota. (c) The quantity supplied is unaffected by a binding quota. (d) The price of new cars will rise until there is no excess demand. (e) The price of new cars will fall until there is no excess demand. (f) Consumer surplus will increase as a result of the quota. (g) Consumer surplus will decrease as a result of the quota. (h) Consumer surplus will be unaffected…
Graphically depict the market for hogs in China, assuming that the demand curve slopes down and the supply curve slopes up. This is purely an analysis of the impact of African swine fever. It is true that trade wars between the U.S. and China are significant, but for this analysis, we are just looking for the impact of the deadly swine fever independent of any other external shocks to the Chinese pork production industry.
which statement is true and why are the others false.justify Moving production from a high-cost producer to a low-cost producer will decrease total surplus;TRUE Suppose the United States changed its laws to allow for the legal sale of a kidney and the government allowed a free market in organs for transplant then there would be a decrease in the price of a kidney and an increase in the shortage of kidneys for transplant;TRUE If a good is not being produced by sellers with the lowest cost, then the market reflects inefficiency in the allocation of resources:FALSE Assume there are only three sellers in a particular market. The cost of production for Annie is $50, for Beth it is $40 and for Cathy it is $35. If the price in the market is $45 then Annie will sell the product but Beth and Cathy will not sell. :FALSE Suppose favorable weather provides increases apple production. As a result, consumer surplus in the market for orange juice decreases because the supply curve of apple juice…
Situation 4-1 During the winter of 1973-74, a general system of wage and price controls (including a price ceiling on gasoline) was in force in the United States. At the beginning of 1974, some oil-producing countries imposed an oil embargo (a legal prohibition on commerce) on the West. In the spring of 1974, price controls were abolished. Refer to Situation 4-1. If no price controls had been in place, the effect of the oil embargo on the equilibrium price and quantity of gasoline would have been a. an increase in price and a decrease in quantity. b. an increase in both price and quantity. c. a decrease in both price and quantity. d. a decrease in price and an increase in quantity.
The domestic market of a small country is described by the following supply and demand curves: Qs = P-50; Qd = - P + 100. World price P = 50. Determine the volume of losses and benefits of domestic producers and consumers, provided that there is free competition in the global and domestic markets.
Question 11. Consider the market for flounders (a sort of fish). The demand curve in the northern part of the country is given by QN (P) = 2000-100P while that in the southern part is Qs(P) = 5000-500P. The supply curve for the entire country is Q(P) = 20P. What is the market demand for the entire country (i.e., northern and southern part combined) at a price of P=11 (round to the nearest integer if needed)? a) Q = 199 b) Q =10 c) Q =900 d) Q = 400
Corn is a very valuable product for which the U.S. government routinely offers subsidies. With no price support, the equilibrium price for corn is $300 per ton and the equilibrium quantity is 500 million tons per year. Suppose that the government agrees to pay farmers $350 for every ton of corn they produce and can't sell in the market. According to the farmer's market supply curve, 600 million tons per year is supplied at the price of $350 a ton, so production should increase to this amount. However, domestic users of corn cut back their purchases. Only 450 million tons a year is demanded at the price of $350 a ton, and purchases decrease to this amount. Farmers continue to produce 500 million tons of corn per year, so because they produce a greater quantity of corn than domestic buyers are willing to purchase, something must be done with the surplus. To make the price support work, the government decides to buy the surplus. a. In this example, how many million tons does the…
Due to fear about mad cow disease, Japan stopped importing animal feed from Britain in 1996, beef imports and processed beef products from 18 countries including EU members starting in 2001, and similar imports from Canada and the United States in 2003. After U.S. beef imports were banned, McDonald’s Japan and other Japanese importers replaced much of the banned U.S. beef with Australian beef, causing an export boom for Australia (“China Bans U.S. Beef,” cnn.com, December 24, 2003; “Beef Producers Are on the Lookout for Extra Demand,” abc.net.au, June 13, 2005). Use supply and demand curves to show the impact of these events on the domestic Australian beef market.
17. August and François are the only sellers of sparkling water at a market in a small, rural French town. They obtain their sparkling water for free from wells in their backyards and transport it to the market in wheelbarrows; neither has access to motorized transportation. Identify the type of

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