The typically price-inelastic demand for agricultural products can be explained by Multiple Choice C Increasing opportunity costs. Increasing marginal costs. Slowly diminishing marginal utility. Rapidly diminishing marginal utility. L
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- Identify the effect each scenario would have on the market for various products.For each scenario:- Label the P & Q of the graph as well as the original supply curve, demandcurve, and market equilibrium (S1, D1, E1).- Identify whether it would first cause a shift in supply or demand and draw andlabel the new curve and market equilibrium (S2 or D2, E2)-Identify whether the equilibrium price and quantity will increase or decreasea. Insects kill half the nation’s tomato crop. What will happen to the market fortomatoes?b. The price of salmon, a substitute for tuna, skyrockets. What will happen to themarket for tuna?c. New assembly line technology makes it cheaper to produce car parts. Whatwill happen to the market for cars?2. The demand for good X is given by:d= 6,000 - 0.5Px - Py +9Pz + 0.1MQxResearch shows that the prices of related goods are given by Py = $6,500 and Pz = $100, while theaverage income of individuals consuming this product is M = $70,000. a. How many units of good X will be purchased when Px = $5,230? b. Determine the demand function and inverse demand function for good X. Graph the demand curve forgood X.Please no written by hand solutions and no image. 3. Given the following information; solve the consumer's problem by finding the optimal demand functions for X and Y: U(X, Y) = X ^ (1/3) * Y ^ (2/3) Also, you are given the following initial market conditions: Px =\$6 Py =\$4 M =\$360 a. Setup the Optimization Problem b. Find the First Order Conditions of Optimization c. Find X ^ * and Y ^ * d. Graph the solution and explain the economic intuition behind the graph: i.e. What are the conditions met at the optimal bundle? Introduce another consumption bundle and explain why it is NOT the optimal. e. If income doubles, what will the new x ^ * and Y ^ * be? f. If your preferences change and you prefer X and Y equally; illustrate how the consumer's optimization problem might change and solve for the new X ^ * and Y ^ * under your new model.
- Your Best Brand Bike Shorts-BBB Shorts have been flying off the shelf. Your chiefeconomist tells you that during the Covid-19 pandemic, the taste for bicycling has shifted. Thedemand curve is much more inelastic. The price elasticity of demand has decreased from:-5.76 to -2.70.”Before the campaign your price was $240 per pair of BBB Shorts. What should bethe new price? Please show calculations.Exhibit 6-7 Marginal utility for sandwiches and sodas Quantity Sandwiches Sodas 1 10 5 2 8 4 3 6 3 4 3 1 5 −1 0 Refer to Exhibit 6-7. Diminishing marginal utility for sandwiches sets in after the ____ sandwich. a. second b. fourth c. firstTrue or False explain 2. A consumer’s budget line is kinked towards the origin (i.e., the kink is pointing towards the origin) if this consumer faces a lower price per unit of x as more x is consumed.
- Subject: Manegerial economics & policy Mcq's 7) A good with a horizontal demand curve has an elasticity of infinity zero less than 1 None of the above 8) Which of the following is not a cause of the shift in demand for a product? change in price of product Change in the price of substitute Change in the income of a consumer None of the above 9) If the price elasticity of demand for wheat is less than 1, then the demand of wheat is" elastic unit elastic Inelastic quite sensitive to changes in income6 Input either "increase" or "decrease" where relevant: A decrease in the price of a complementary good will cause its complement’s equilibrium price to ....... and the equilibrium quantity to .......Explain how MRS = MRT is derived for consumers who want to maximize their well-being utility subject to their budget constraint. Also explain how marginal utilities divided by each price of the good are equalized across the available goods is also derived for consumers who want to maximize their being utility subject to their budget constraint.
- Q1: The demand for good X is given by Qx d = 6,000 − 1/2 Px − Py + 9 Pz + 1/10 M. Research shows that the prices of related goods are given by Py = $6,500 and Pz = $100, while the average income of individuals consuming this product is M = $80,000. a. How many units of good X will be purchased when Px = $5,230? The calculation should be handwritten1. Find the equilibrium price and quantity with QD = 90 -15P and QS =-10 + 10P 2. Increase the demand function in problem 1 by 50 and calculate the new equilibrium price and quantity. Note that the new demand curve should show that the QD is 18 units greater at every price, not just the just the problem equilibrium quantity. Add 18 to the demand equation.Mr. Shrikant always spends 20% of his income on commodity 'X'. The income elasticity of demand for commodity 'X' is O a. 0,15 O b. 6.67 OC -0.15 Od . 1
