HW chap 2

5busheland115billionbushelsofcornincludingthe35billion

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Unformatted text preview: ntity equals 8.0 billion bushels plus 5.6 billion bushels e z to.mhe c loud.mc gr a w- hill.c om/hm.tpx? todo= pr intvie w 3/9 1/14/14 Assignme nt Pr int Vie w purchased by the government. Alternatively, the government purchase of 5.6 billion bushels of corn can be seen as an outward shift in demand by 5.6. This will result in a new demand function: Qd = 18.5 ­ 2P. Note that the new equilibrium price and quantity will still be $3.5/bushel and 11.5 billion bushels of corn including the 3.5 billion bushels purchased by the government. 5. awar d: 16.66 out of 16.66 points Suppose the demand function for jelly beans in Cincinnati is linear. Two years ago, the price of jelly beans was $1.75 per pound, and consumers purchased 103,000 pounds of jelly beans. Last year the price was $3.00, and consumers purchased 53,000 pounds of jelly beans. No other factors that might affect the demand for jelly beans changed. a. What was the elasticity of demand at last year’s price of $3.00? Instr...
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