Problem 1:
Mali
Apples 40 32 24 16 8 0
Bananas 0 4 8 12 16 20
US Production Possibilites
apples 75 60 45 30 15 0
Bananas 0 5 10 15 20 25
Based on above info
1. graph each country's production possibilites curve.
2. On the graph for Mali,
a. show a production point not attainable at this time
b. show a point of inefficiency
c explain the impact on production if the inefficiency is addressed
Problem 2.
Market for corn
Demand Supply
Price Quantity of bushels price Quantiy of bushels
$3.50 10 $3.50 45
$3.25 12 $3.25 35
$3.00 14 $3.00 26
$2.75 18 $2.75 18
$2.50 25 $2.50 15
$2.25 34 $ 2.25 12
$2.00 46 $2.00 10
1. Illustrate on a graph supply demand and market equilibrium label them S1, D1, P1 and Q1
2. Explain what will happen to the price of corn it its currently at $3.50
3. Explain what will happen to the price of corn if its currently at $2.00
4. Assume that good growing condition increase the quantity that will be supplies 10 bushels at each price. Illistrate the new supply curve on a graph an label it S2. What happens to market equilibrium?
5. Unfortunately for the farmers, consumer taste change and the quantity that will be demanded decreases by 12,000 bushels at each price. Illustrate the new demand curve and label it D2. What happens to the market equilibrium?