Mid-term questions for Comm220

Mid-term questions for Comm220 - Chapter 1: The following...

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Chapter 1: The following table shows the average retail price of oranges and the CPI from 2000 to 2010. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 CPI 281.6 7 296.3 4 298.3 1 309.1 1 316.1 7 330.0 0 331.1 4 340.6 1 347.1 1 351.3 2 360.1 8 $ 1.16 1.19 1.47 1.58 1.59 1.71 1.79 2.13 2.24 2.41 2.74 a) Calculate the real price of oranges in 2000 dollars. Has the real price icreased/decreased/stayed the same since 2000? 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Real 1.16 1.13 1.39 1.44 1.42 1.46 1.52 1.76 1.82 1.93 2.14 The real price of oranges has significantly increased since 2000. b) What’s the % change in the real price of oranges from 2000 to 2010? The real price has increased by 84.48%
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Chapter 2: Use the following information to answer the questions below. -Free market price of oranges: P o = $4.50 / thousand kg - Qd = Qs at Q* = 240 thousand kilograms - Market price of apples: P A = $3.00 / thousand kg - Price elasticity of supply for oranges = 0.3 - Cross-price elasticity of supply for oranges with regards to the price of apples = 0.1 - Price elasticity of demand for oranges = -0.6 - Cross-price elasticity of demand for oranges with regards to the price of apples = 1.5 a) Find the supply and demand equations for oranges. Qd = 384 – 32P Qs = 168+16P b) If the price of apples moves from $3.00 to $3.50, what will happen to the quantity demanded of oranges? It will increase to 300. c) What does your answer in b seem to suggest about the relationship between oranges and apples. It suggests both goods are substitutes. d) With price of apples being $3.00, what would happen if the price or oranges was regulated at $5.00 per thousand kilograms? It would create a surplus in the orange market of 24 thousand kg. In other words, farmers would be willing to produce 24 thousand kg or oranges more than what the consumers would be willing to consume.
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Chapter 3: Which of the following, is not a characteristic of consumer preferences in regards to goods:
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Mid-term questions for Comm220 - Chapter 1: The following...

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