AEC 305 (Fall 2009) Exam II (20%) Name _________________________________________________ 1.Indicate whether the following variables (holding all other factors constant) will : a.affect the primary supplyor the primary demandfor apples, b.be represented by a shift or a movement along the supply or demand curves for apples. AND if a shift in which direction (i.e., right or left), c.increase or decrease apple prices, d.increase or decrease apple quantitiesAn example is provided for you to follow. (1 point each) Variable Does it Impact Primary Supply or Primary Demand?Movement or Shift to the Right or Left? Price Increase or Decrease? Quantity Increase or Decrease?Higher Income (normal good) Primary Demand Shift to the Right Increase Increase Biotechnology Adoption Which Increases Producer Yields Health Study Indicating Benefits of Consuming Apples Higher Chemical Costs to Produce Apples Consumer Price Subsidy for Apples 2.As the purchasing manager for Kroger, you are attempting to estimate the anticipated consumer demandfor turkeys for the upcoming holiday season. Identify three demand factors you would include in your demand analysis. (2 points each) i._______________________________________________________ ii.________________________________________________________ iii.________________________________________________________ 3.Match the statement on the right with the appropriate economic measurement the statement reflects on the left. (2 points each) ______ Price Flexibility Coefficient A.A 10 percent increase in the price of eggs induces a 2 percent decline in the quantity of bacon demanded, holding all other factors constant. ______ Own Price Elasticity of Demand B.A 10 percent increase in the quantity of soybeans induces a 15 percent decline in the price of soybeans, holding all other factors constant. ______ Cross Price Elasticity of Demand C. A 10 percent increase in the price of beef induces a 3 percent decline in the quantity of beef demanded, holding all other factors constant.
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