2009Problem Set 7

# 2009Problem Set 7 - AEM 4150 Price Analysis Fall Semester...

This preview shows pages 1–2. Sign up to view the full content.

AEM 4150 Price Analysis Fall Semester 2009 Homework Assignment 7 This assignment is due at the beginning of class on Tuesday November 3. Total points 13 Question 1 Soybeans are processed into the joint products soybeans meal and oil. Consider 50 pounds of soybean, which is processed into 30 pounds of meal and 10 pounds of oil. We assume that the price of soybean meal is 12 cents per pound and that the price of soybean oil is 18 cents per pound. We further assume that the price elasticities for meal and oil are respectively –0.7 and –1.5. (a) State the formula calculating the price elasticity of soybeans and the assumptions under which this formula is valid (1 point) (b) Using (a) calculate the price elasticity of soybeans, using the price elasticities of soybean meal and soybean oil (1 point) Question 2 Suppose that lamb was determined to have only 2 significant substitutes, beef and pork. Given the following information the own price elasticity of demand for lamb is –0.53 the cross price elasticity of demand for lamb with respect to beef is 0.29

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern