Question: Submission Feedback Overall Feedback Please be advised that 5,000 lbs. at $3.50 is not correct. You need to find the new quantity demanded at $3.50
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| Overall Feedback | |
| Please be advised that 5,000 lbs. at $3.50 is not correct. You need to find the new quantity demanded at $3.50 for ONLY Brazil. Hi, Elizabeth. I am confused now. It appears you changed the price from $3.50 to $2.50, which is not correct, and 3,000 lbs. for quantity demanded is not correct either. Please advise why you changed the price, and please be advised that this module cannot be passed with the correct new price and quantity demanded. Thanks. | |
1. Suppose that the supply schedule of Brazilian coffee beans is as follows:
Table 1
Price of Brazilian coffee beans (per pound) | S Quantity of Brazilian coffee beans supplied (pounds) |
| $4.00 | 6,000 |
| $3.50 | 5,000 |
| $3.00 | 4,000 |
| $2.50 | 3,000 |
| $2.00 | 2,000 |
Suppose that Brazilian coffee beans can be sold only in Brazil. The domestic Brazilian demand schedule for Brazilian coffee beans is as follows
Table 2
Price of Brazilian coffee beans (per pound) | DB Brazilian quantity of Brazilian coffee beans demanded (pounds) |
| $4.00 | 1,000 |
| $3.50 | 2,500 |
| $3.00 | 4,000 |
| $2.50 | 5,000 |
| $2.00 | 7,000 |
- From the supply and demand schedules above, what are the equilibrium price and quantity of Brazilian coffee beans?
Now suppose that Brazilian coffee beans can also be sold in Canada. The Canadian demand schedule for Brazilian coffee beans is shown in Table 3.
Table 3
Price of Brazilian coffee beans (per pound) | DC Canadian quantity of Brazilian coffee beans demanded (pounds) |
| $4.00 | 1,000 |
| $3.50 | 2,500 |
| $3.00 | 3,000 |
| $2.50 | 5,000 |
| $2.00 | 5,500 |
- Complete column DC+DB total combined Canadian and Brazilian coffee beans demanded of Table 4, by inserting the correct values, computed from information contained in Tables 2 and 3, at each price.
Table 4
Price of Brazilian coffee beans | S Quantity of Brazilian coffee beans supplied | DB Brazilian quantity of Brazilian coffee beans demanded | DC+DB Total combined Canadian and Brazilian coffee beans demanded |
| (per pound) | (pounds) | (pounds) | (pounds) |
| $4.00 | 6,000 | 1,000 | |
| $3.50 | 5,000 | 2,500 | |
| $3.00 | 4,000 | 4,000 | |
| $2.50 | 3,000 | 5,000 | |
| $2.00 | 2,000 | 7,000 |
Below is the new supply and demand graph (Graph 2.b.) that illustrates the equilibrium price and quantity of Brazilian coffee beans.
(Description: A graph with quantity of Brazilian Coffee Beans along the horizontal axis and Price, in dollars along the vertical axis is entitled “Brazilian Supply (S), Brazilian Demand (DB) and Combined Brazilian and Canadian (DC+B) for Brazilian coffee Beans.” A downward sloping, green, demand curve, labeled DB, crosses the, red, upward sloping supply curve, labeled S. A second downward sloping, blue, demand curve is labeled DC+B and crosses the supply curve higher and to the right from where the DB curve crosses.)
- From the completed Table 4, what will be the new price at which Brazilian coffee growers will sell Brazilian coffee beans?
- From the completed Table 4, what price will now be paid by Brazilian consumers?
- From the completed Table 4, what will be the quantity consumed by Brazilian consumers?
2. In ancient days, a tribe of natives on the mythical continent of Atlantis were able to produce two commodities to eat. They could harvest fish from the sea and they could grow a form of wild oats. Table 5 and Graph 1.a. both show the maximum annual output combinations of fish and wild oats that could be produced by the natives of Atlantis.
Table 5
Maximum annual output options | Kilograms of fish | Bushels of wild oats |
| 1 | 7,000 | 0 |
| 2 | 6,000 | 300 |
| 3 | 5,000 | 500 |
| 4 | 4,000 | 625 |
| 5 | 3,000 | 710 |
| 6 | 2,000 | 775 |
| 7 | 1,000 | 825 |
| 8 | 0 | 850 |
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