Use graphs and a brief explanation to answer the following. If corn is an input into...

Use graphs and a brief explanation to answer the following.

If corn is an input into the production of ethanol, will an increase in the price of corn increase or decrease the equilibrium price of ethanol?
If recycled paper is a substitute for paper made from timber, will an increase in the price of recycled paper increase or decrease the equilibrium quantity of paper made from timber?
The demand curve for gasoline is inelastic. Will an increase in the supply of gasoline raise or lower revenues in the gasoline market?

Expert Solution

Answer : 1) As corn is the input of ethanol production, hence if price rise for corn then ethanol production cost increase. As production cost increases for ethanol hence the production level decreases. For this reason the supply curve of ethanol shift to leftward. As a result, at new equilibrium the price level increase for ethanol. This situation is shown by the following picture's diagram.

In the above diagram E is the initial equilibrium point. After decreasing the production of ethanol the new equilibrium point is E1. At E1 equilibrium point the price level of ethanol increases from P to P1.

2) In case of substitute goods if price of one good increase then demand decrease for that good but demand increase for another good. Due to increase in demand for good the demand curve shift to rightward. As a result, at new equilibrium the quantity level increase. This situation is shown by the following picture's diagram.

In the above diagram E is the initial equilibrium point for paper made from timber. Due to increase in price for substitute good recycled paper the demand for recycled paper decrease but the demand for paper made from timber increase. After increasing demand for paper made from timber the new equilibrium point is E1. At E1 equilibrium point the quantity level increases from Q to Q1.

3) In case of inelastic demand if price rise then total revenue increase and if price fall then total revenue decrease. Here the demand for gasoline is inelastic. In this situation if supply of gasoline increase then the price level decrease. As a result, the total revenue decrease. This situation is shown by the following picture's diagram.

Rahul Sunny answered 2 years ago

Use the following graphs to answer the next question. In the graphs, the numbers in parentheses...

Use the following graphs to answer the next question. In the graphs, the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the level of investment spending associated with each curve, respectively. All numbers are in billions of dollars. The interest rate and the level of investment spending in the economy are at point C on the investment demand curve. To achieve the long-run goal of a noninflationary, full-employment output of Qf in the economy, the Fed should...

Answer each of the following statements True/False/Uncertain. Give a full explanation of your answer including graphs...

Answer each of the following statements True/False/Uncertain. Give a full explanation of your answer including graphs where appropriate. (When in doubt, always include a full labeled graph.) A) An individual’s Marginal Rate of substitution is different at every point along his or her price consumption path. B) Quasi-Linear utility, Cobb-Douglas utility, and perfect substitutes are each able to characterize an individual having interior and corner solutions for a positive level of consumption. C) Consider the following three consumption bundles (X1,X2)=(10,10)...

Answer the following questions and provide a brief explanation: How many values does it take to...

Answer the following questions and provide a brief explanation: How many values does it take to represent a joint distribution p(x, y) of 4 boolean variables? How many of these values can be chosen independently? What are the answers for the above question if we know that x and y are independent?

PLease answer the questions in brief with graphs. A change in relative prices will always change...

PLease answer the questions in brief with graphs. A change in relative prices will always change a utility maximizing consumer’s marginal rate of substitution. 1b) Competitive firms shutdown production when price falls below the minimum of the average total cost curve. 1c) An increase the price of firms output will always increase the use of an input. 1d) An import tariff on a commodity will increase the price for the producers of the commodity producers in the exporting country. 1e)...

please answer this question in brief with graphs. 2a. In two paragraphs, describe the sources of...

please answer this question in brief with graphs. 2a. In two paragraphs, describe the sources of the gains from trade and why countries use import tariffs. 2b In two paragraphs, describe how the COVID-19 pandemic has impacted the global macro economy and multiple ways it has impacted a specific agricultural commodity market (e.g. corn, beef, wheat).

Answer questions 1-3 with a brief explanation This region of the brain that is responsible for...

Answer questions 1-3 with a brief explanation This region of the brain that is responsible for the contribution of somatic motor movements, which regulates balance in movements. Thalamus Cerebrum Amygdala Cerebellum Mark was taken to the ER due to a lack in feeling of pain and temperature sensations around his body. It was discovered that part of his spinal tract, connecting the spine and thalamus, was severed. Which tract was likely severed, causing his lack in above sensations? Anterior Spinothalamic...

Working with Numbers and Graphs Q9 Use the following table to answer the questions that follow....

Working with Numbers and Graphs Q9 Use the following table to answer the questions that follow. Item Dollar Amount (Billion Dollars) Durable goods 220 Nondurable goods 400 Services 700 Fixed investment 120 Inventory investment 20 Government purchases 500 Exports 100 Imports 150 Capital consumption allowance 20 Compensation of employees 700 Proprietors’ income 480 Corporate profits 200 Rental income 200 Income earned from the rest of the world 40 Income earned by the rest of the world 200 Indirect business taxes...

Draw a supply and demand graph of the following scenarios. Use these graphs to answer what...

Draw a supply and demand graph of the following scenarios. Use these graphs to answer what happens to price and quantity? (Does is increase or decrease?) Must show graphs and answer what happens to price and quantity. a. (5 points) Cheese Market: Suppose that a technological advancement substantially reduces the cost of producing cheese, while a new study suggests that excessive use of cheese is harmful to a person’s health. b. (5 points) Cream Market: Peaches and cream are complements....

Answer the following questions using TRUE, FALSE or UNCERTAIN. Make sure you provide a brief explanation...

Answer the following questions using TRUE, FALSE or UNCERTAIN. Make sure you provide a brief explanation for each of your answers. Your score will largely reflect the quality and relevance of your explanation. (i) In the IS-LM model, equilibrium output is determined in the goods market, while equilibrium interest rate is determined in the bond market. (ii) A $100 million increase in defense spending will have the same impact on equilibrium output as does a $100 million tax cut.

What is a brief explanation of the system use case diagram? What is the purpose of...

What is a brief explanation of the system use case diagram? What is the purpose of the use case diagram, and why might a system analysts draw many different use case diagrams when reviewing the use cases with end-users?

Question