economics questions
Project Description:
1) suppose that corn currently costs $4 per bushel and that wheat currently costs $3 per bushel. also assume that the price elasticity of corn is .10 , while the price elasticity of wheat is .15. for the following questions about elasticity of simply use the percentage changes that are provided rather than attempting to calculate those percentage changes yourself using the midpoint formula.
a) if the price of corn fell by 25 percent to $3 for bushel , by what percentage would the quantity demanded of corn increase? what if the price of corn fell by 50 percent to $2 per bushel?
b) to what value would the price of wheat have to fall to induce customers to increase their purchases of wheat by 5 percent?
c) if the government imposes a $.40 per bushel tax on corn so that the price of corn rises by 10 percent to $4.40 per bushel , by what percentage would the quantity demanded of corn decrease? if the initial quantity demanded is 10 billion bushels per year, by how many bushels would the quantity demanded decrease in response to this tax?
2) suppose that 10 workers were required in 2010 to produce 40,000 bushels of wheat on a 1000acre farm.
a) what is the average output per acre? per worker?
b) if in 2020 only 8 workers produce 44,000 bushels of wheat on that same 1000acre farm, what will be the average output per acre? per worker?
c) by how what percentage does productivity (output per worker) increase over those 10 years? over those 10 years, what is the average annual percentage increase in productivity?
a) if the price of corn fell by 25 percent to $3 for bushel , by what percentage would the quantity demanded of corn increase? what if the price of corn fell by 50 percent to $2 per bushel?
b) to what value would the price of wheat have to fall to induce customers to increase their purchases of wheat by 5 percent?
c) if the government imposes a $.40 per bushel tax on corn so that the price of corn rises by 10 percent to $4.40 per bushel , by what percentage would the quantity demanded of corn decrease? if the initial quantity demanded is 10 billion bushels per year, by how many bushels would the quantity demanded decrease in response to this tax?
2) suppose that 10 workers were required in 2010 to produce 40,000 bushels of wheat on a 1000acre farm.
a) what is the average output per acre? per worker?
b) if in 2020 only 8 workers produce 44,000 bushels of wheat on that same 1000acre farm, what will be the average output per acre? per worker?
c) by how what percentage does productivity (output per worker) increase over those 10 years? over those 10 years, what is the average annual percentage increase in productivity?
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