Assume that the markets for sugar cane, rum and whiskey are initially in equilibrium (i.e., supply equals demand in each case). Assume further that a good harvest impacts the world's sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes in consumption. Discuss the effect on the markets for each of the three products if the government implements a price restriction in the sugar cane market with the aim of protecting the farmers. How will this impact the revenues for sugar growers, rum producers and whiskey producers?
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- Suppose that the supply function for lamb in Australia is Q = 149 + 8p - 9ps, where Q is the quantity in millions of kg of lamb per year, and pand psare the prices of lamb and sheep, respectively, in Australian dollars per kg. How does the supply curve change if the price of sheep increases from AU$5 to AU$5.50 per kg? (Hint: See Solved Problem 2.1.There are 40 people living in a village each having preference over apples andshirts represented by U(a,b) = a1/3s2/3, where a and s are amount of applesin pounds and shirts consumed, respectively. The price of a shirt is $10. Each villager has $300 income. Apples are supplied to the village by a farmer, whose supply function is S(pa) = 1000pa.Part a1What is the equilibrium price of apples? How many pounds of apples does eachvillager consume?Part a2What is the aggregate net consumer surplus at the equilibrium?Part a3What is the price elasticity of demand at the equilibrium?Part b1Suppose 50 more people move in to the village. What is the equilibrium pricenow? Part b2Are consumers better or worse off now? Why? If a consumer is worse off, byhow much additional income he/she needs to be compensated in order to be aswell off as in Part a.Assume that the markets for sugar cane, rum and whiskey are initially in equilibrium (i.e., supply equals demand in each case). Assume further that a good harvest impacts the world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes in consumption. Discuss the impact of the good harvest on each of the three markets. Discuss the effect on the markets for each of the three products if the government implements a price restriction in the sugar cane market with the aim of protecting the farmers. How will this impact the revenues for sugar growers, rum producers and whiskey producers?
- Assume that the markets for sugar cane, rum and whiskey are initially in equilibrium(i.e., supply equals demand in each case). Assume further that a good harvest impactsthe world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is notan ingredient in whiskey. Rum and whiskey are substitutes in consumption.(i) Discuss the impact of the good harvest on each of the three markets.Why would a free market never operate at aquantity greater than the equilibrium quantity? Hint:What would be required for a transaction to occur at thatquantity?This problem involves solving demand and supply equations together to determine price and quantity. a. Consider a demand curve of the form QD=-2P+20, where QD is the quantity demanded of a good and P is the price of the good. Graph this demand curve. Also draw a graph of the supply curve Qs =2P-4, where Qs is the quantity supplied. Be sure to put P on the vertical axis and Q on the horizontal axis. Assume that all the Qs and Ps are nonnegative for parts a, b, and c. At what values of P and Q do these curves intersect-that is, where does QD = Qs ? b. Now, suppose at each price that individuals demand four more units of output-that the demand curve shifts to QD - 2P+24. Graph this new demand curve. At what values of P and Q does the new demand curve intersect the old supply curve-that is, where does QD = Qs ? c. Now finally, suppose the supply curve shifts to Q's=2P-8. Graph this new supply curve. At what values of P and Q does QD=Q's? Show all working calculations and label garph with…
- A market consists of groups of buyers and sellers of a good or service. Market equilibrium represents the price at which the quantity of goods supplied is balanced with the number of goods consumers are willing and able to buy. Consider the market for coffee: Assume first that there is a heatwave that damages a large portion of coffee beans. Describe how this would affect equilibrium in the market for coffee. Specifically, does demand or supply shift, in which direction, and what is the effect on equilibrium price and quantity? Last, extend your analysis to the long run, a period of time long enough for new coffee growers to enter the market or for existing growers to exit the market. How might equilibrium price and quantity in the market for coffee be affected when enough time is allowed for a change in the number of sellers in the market?Suppose demand and supply for eggs are given by the following equation: Qd = 100-20P Qs = 10 +40P Where Qd = number of eggs purchased yearly Where Qs = number of eggs farms would sell yearly Where P = price per dozens of eggs a) Fill in the following table Price Per Dozen 5.00 6.00 6.50 7.00 7.50 Quantity Demanded (Qd) - - - - - Quantity Supplied (Qs) - - - - - b) Use the information to find the equilibrium price and equilibrium quantity, c) Graph the demand and supply curves and identify the equilibrium price and quantity. please sir solve accurate and fast and three parts. Ok thanks.One of the largest changes in the economy over thepast several decades is that technological advanceshave reduced the cost of making computers.a. Draw a supply-and-demand diagram to showwhat happened to price, quantity, consumersurplus, and producer surplus in the market forcomputers.b. Forty years ago, students used typewriters toprepare papers for their classes; today theyuse computers. Does that make computersand typewriters complements or substitutes?Use a supply-and-demand diagram to showwhat happened to price, quantity, consumersurplus, and producer surplus in the marketfor typewriters. Should typewriter producershave been happy or sad about the technologicaladvance in computers?c. Are computers and software complements orsubstitutes? Draw a supply-and-demand diagramto show what happened to price, quantity,consumer surplus, and producer surplus in themarket for software. Should software producershave been happy or sad about the technologicaladvance in computers?d. Does this…
- Suppose that in the citrus market, while the amount of production decreased due to cold winter conditions, consumers' desire to drink citrus juice increased in order to strengthen their immunity due to the COVID-19 epidemic. In this case, how is the equilibrium price and quantity affected in the citrus market? Evaluate this with the help of the figure for the case where the supply curve shifts more than the demand curve. (Note: Do not forget to write the names of the axes while drawing the figure. Show clearly the supply-demand curve and the market equilibrium point in the first case and the supply-demand curve and equilibrium point after the shift.)Market researches have studied the market for milk,and their estimates for the supply of and the demand for milk per month are as follows:a.Using the data,graph the demand for and the supply for milk.Identify the equilibrium point as E,and use dotted lines to connect E to the equilibrium price onthe price axis and the equilibrium quantity on the quantity axis.b.Suppose the government enacts amilk price support of $8per gallon.Indicate this action on your graph,and explain the effect on the milk market?Why would the government establish such a price support?c.Now assume the government decides to set a price ceiling of $4 dollar per gallon.Show and explain how this legal price effects your graph of the milk market.What objective could the government be trying to achieve by establishing such a price ceiling?Determine whether each of the following statementsis true, false, or uncertain. Then briefly explain each answer.a. In equilibrium, all sellers can find buyers.b. In equilibrium, there is no pressure on the market to produce orconsume more than is being sold.c. At prices above equilibrium, the quantity exchanged exceeds thequantity demanded.d. At prices below equilibrium, the quantity exchanged is equal tothe quantity supplied