EQ 10 2010 answer - CS = $500 TES = $1,250(d True or False...

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EQ # 10 – AGEC 105 – March 22, 2010 (8 points) Name: _______________ UIN:_____________ Section:__________ 1. If the marginal physical product of fertilizer in the production of corn is 60 bushels/ton, and if the price of corn is $5/bushel, then the marginal value product of fertilizer is ___ $300 _ per ton. MVP = P x MPP = 60 bu/ton x $5/bu = $300/ton 2. Given the following diagram, (a) What is the market clearing price of milk? $2.50 (b) What is the producer surplus? $750 (c) What is the total economic surplus?
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Unformatted text preview: CS = $500 TES = $1,250 (d) True or False . With a successful milk advertising campaign (Got Milk?), the market price of milk will rise and the market clearing quantity of milk will fall. $3.50 $2.50 P Mil k 1,000 Q Milk $1.00 S Milk D Milk 3. Given a leftward shift in demand for a product as illustrated below, fill in the blanks regarding questions about producer surplus. Producer Surplus Before __ C + D + E __ After ____ E _____ Change ____-C - D ____ P P 1 P 2 Q A B I D 1 D 2 C D G H E F S...
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