HW1 - EEP 100 Homework # 1 Due in class February 2 Perloff...

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EEP 100 Homework # 1 Perloff Due in class February 2 Questions 2. The 9/11 terrorist attacks caused the U.S. airline travel demand curve to shift left by an estimated 30% (Ito and Lee, 2005). Use a supply-and-demand diagram to show the likely effect on price and quantity (assuming that the market is competitive). Indicate the magnitude of the likely equilibrium price and quantity effects—for example, would you expect equilibrium quantity to change by about 30%? Show how the answer depends on the shape and location of the supply and demand curves. 6. Ethanol production from corn increased 5.5 fold from 2000 to 2008 ( www.ethanolrfa.org ). What effect did this increased use of corn for producing ethanol have on the price of corn and the consumption of corn as food? 16. According to Borjas (2003), immigration to the United States increased the labor supply of working men by 11.0% from 1980 to 2000, and reduced the wage of the average native worker by 3.2%. From these results, can we make any inferences about the elasticity of supply or demand? Which curve (or curves) changed, and why? Draw a
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HW1 - EEP 100 Homework # 1 Due in class February 2 Perloff...

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