3. At a price of $20 per tonne, the supply of wheat in Canada is 25...

3. At a price of $20 per tonne, the supply of wheat in Canada is 25 million tonnes and the demand is 30 million tonnes. When the price increases to $25 per tonne, the supply increases to 30 million tonnes and the demand decreases to 20 million tonnes. Assume both the demand and supply curves are linear.

3. At a price of $20 per tonne, the supply of wheat in Canada is 25 million tonnes and the demand is 30 million tonnes. When the price increases to $25 per tonne, the supply increases to 30 million tonnes and the demand decreases to 20 million tonnes. Assume both the demand and supply curves are linear. [15 points]

a. What is the equation for the demand curve for wheat?

b. What is the equation of the supply curve for wheat?

c. Using these equations, what is the equilibrium price and quantity of wheat? Draw and label these points on a graph.

d. If the government imposes a tax of $2 per unit, calculate the price buyers will pay, price sellers receive. Also, show this on the graph above.

e. What is the deadweight loss created by the tax?

Expert Solution

Rahul Sunny answered 3 years ago

Suppose the equilibrium price of gasoline is $3 per gallon. a. Using the demand and supply...

Suppose the equilibrium price of gasoline is $3 per gallon. a. Using the demand and supply graph, draw this equilibrium in the space below. Make this graph large, it will be used for future questions. b. Now suppose the government imposes a binding price floor on this market. Identify a value for this price floor that would be binding and show it on the graph. Graphically show whether excess demand or excess supply would result. c. With the price floors,...

Price: $25 $18 $20 $20 $30 $22 $26 What is the mean price for an adult...

Price: $25 $18 $20 $20 $30 $22 $26 What is the mean price for an adult haircut? What is the median price for an adult haircuit? What is the mode price for an adult haircut? Compute the 60th percentile. What does this value mean? Compute the second quartile. What does this value mean? What is the variance for the prices? What is the standard deviation?

Home’s demand curve for wheat is D = 100-20P. Its supply curve is S = 20...

Home’s demand curve for wheat is D = 100-20P. Its supply curve is S = 20 + 20P. Suppose that Home is a small country. a. Graph the demand and supply curves. b. In the absence of trade, what would the price of wheat be in Home? c. The price of wheat in the world market is 1.5. What is the free-trade equilibrium price of wheat in Home? d. Determine the amount of domestic production, domestic consumption, and imports of...

Declared a $6 per share cash dividend for common shareholders. The record date is 3-25-20 and...

Declared a $6 per share cash dividend for common shareholders. The record date is 3-25-20 and the payment date is 4-10-20. Journalise this transaction

Farmer Jones is producing wheat and must accept the market price of $7.00 per bushel. At...

Farmer Jones is producing wheat and must accept the market price of $7.00 per bushel. At this time, her average total costs and her marginal costs both equal $9.50 per bushel. Her minimum average variable costs are $7.50 per bushel. In order to maximize profits or minimize losses in the short run, farmer Jones should A. increase output. B. continue producing, but reduce output. C. increase selling price. D. produce zero output and shut down.

Horatio consumes 20 fries and 12 shakes per week. The price of fries is $3 each...

Horatio consumes 20 fries and 12 shakes per week. The price of fries is $3 each and shakes are $5 each. 2.1 What is the amount of income allocated to shakes and fries consumption? 2.2 What is the price ratio (the price of shakes relative to the price of fries)? 2.3 If Horatio maximizes utility, what is the ratio of the marginal utility of shakes to the marginal utility of fries? (Hint: Start with the rule that you know and...

You enter into a futures contract to buy white maize for R1 845 per tonne. The...

You enter into a futures contract to buy white maize for R1 845 per tonne. The contract is for delivery of 1 000 tonnes. The initial margin is R 200 000 and the maintenance margin is R60 000. You receive a margin call as R140 000 was lost from the margin account. Question 1 What change in the futures price led to this margin call and what will happen if you do not meet the margin call?

Consider a project to supply 100 million postage stamps per year to Canada Post for the...

Consider a project to supply 100 million postage stamps per year to Canada Post for the next five years. You have an idle parcel of land available that cost $850,000 five years ago; if you sold the land today, it would net you $1,080,000 after tax. If you sold the land five years from now, the land can be sold again for a net $1,150,000 after tax. You will need to install $4.6 million in new manufacturing plant and equipment...

Westfield Graziers packages and distributes three grades of animal feed. The material cost per tonne and...

Westfield Graziers packages and distributes three grades of animal feed. The material cost per tonne and estimated annual sales for each of the products are as follows. Product Material cost Estimated sales Super Premium $16.00 2,000 tonnes Premium $12.00 3,000 tonnes Economy $10.00 5,000 tonnes The indirect cost of operating the machinery used to package all three products is $40 000 per year. In the past, prices have been set by allocating the indirect costs to products on the basis...

Chapter 5 (#4) Consider the following demand schedule: Price Quantity Demanded Elasticity Coefficient $25 20 -3...

Chapter 5 (#4) Consider the following demand schedule: Price Quantity Demanded Elasticity Coefficient $25 20 -3 20 40 -1.4 15 60 -0.714 10 80 -0.33 5 100 What is the price elasticity of demand between? See attached P = $25 and P = $20? P= $20 and P = $15? P = $15 and P = $10? P = $10 and P = $5?

Question