Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184241
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Chapter 2, Problem 3E
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Much of the demand for U.S. agricultural output has come from other countries. In 1998, the total demand for wheat was Q = 3244 - 283P. Of this, total domestic demand was QD = 1700 - 107P, and domestic supply was QS =1944 + 207P. Suppose the export demand for wheat falls by 40%. a. U.S. farmers are concerned about this drop in export demand. What happens to the free-market price of wheat in the United States? Do farmers have much reason to worry? b. Now suppose the U.S. government wants to buy enough wheat to raise the price to $3.50 per bushel. With the drop in export demand, how much wheat would the government have to buy? How much would this cost the government?
With the recent war between Russia and Ukraine, the production and thus exports of wheat have declined (which increased the price of such exports), because Ukraine is the major producer and exporter of the same. As a result, what can we expect in the market for rice, used by many as a staple instead of wheat?
a) The equilibrium price will increase, the equilibrium quantity will decrease
b) The equilibrium price will increase, the equilibrium quantity will increase
c) The equilibrium price will decrease, the equilibrium quantity will increase
d) The equilibrium price will decrease, the equilibrium quantity will decrease
Q.1. Suppose that the demand for steel in Japan is given by the equation Q's = 1200
- 4Ps + PA+ PT, where QS is the quantity of steel purchased (millions of tons per
year), PS is the price of steel (yen per ton), PA is the price of aluminum (yen per ton),
and PT is the price of titanium (yen per ton). The supply curve for steel is given by Q$s
= 4Ps. Similarly, the demand and supply curves for aluminum and for titanium are
given by Q'A = 1200 – 4PA + Ps + PT (demand curve for aluminum), Q°A = 4PA (supply
curve for aluminum), Qʻr= 1200 – 4PT + Ps+ PA (demand curve for titanium), and QST
= 4PT (supply curve for aluminum).
a) Find the equilibrium prices of steel, aluminum, and titanium in Japan.
b) Suppose that a strike in the Japanese steel industry shifts the supply curve for steel
to Q°s = Ps. What does this do to the prices of steel, aluminum, and titanium?
c) Suppose that growth in the Japanese beer industry, a big buyer of aluminum cans,
fuels an increase in the demand for aluminum…
Chapter 2 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
Ch. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - If a 3-percent increase in the price of corn...Ch. 2 - Prob. 4RQCh. 2 - Explain why for many goods, the long-run price...Ch. 2 - Why do long-run elasticities of demand differ from...Ch. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 9RQCh. 2 - In a discussion of tuition rates, a university...
Ch. 2 - Suppose the demand curve for a product is given by...Ch. 2 - Prob. 12RQCh. 2 - Prob. 13RQCh. 2 - Prob. 1ECh. 2 - Consider a competitive market for which the...Ch. 2 - Prob. 3ECh. 2 - Prob. 4ECh. 2 - Prob. 5ECh. 2 - Prob. 6ECh. 2 - In 2010, Americans smoked 315 billion cigarettes,...Ch. 2 - In Example 2.8 we examined the effect of a...Ch. 2 - In Example 2.8 (page 52), we discussed the recent...Ch. 2 - Prob. 12E
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