Wheat farmers in Kansas would benefit from a devastating crop failure in N.Dakota if the U.S.demand for wheat?
is...
a. inelastic
b. elastic
c. unit elastic
d. downward sloping
e. perfectly elastic
The price elasticity of demand for cigarettes is estimated to be (-.4) and the income elasticity is about (+5).
a- Suppose the government impose a tax on cigarettes so the price rises by 10%. Estimate the effect this price increase will have on cigarettes consumption and consumer spending on cigarettes. (both in percentage terms)
Suppose hospital (A) has 500patients/day and average cost of operation is $1500/day. Hospital (B) has 300 patients/day and average cost of $600/day. Hospital (C) has 100 patients/day and average cost of $600/day. What can you say about the most efficient size of hospital? Explain the reasons for this choice of hospital size. Illustrate your answer with a graph.
To determine whether wheat farmers in Kansas would benefit from a crop failure in North Dakota, we need to analyze the demand elasticity of wheat in the U.S.
Demand elasticity refers to how responsive the quantity demanded of a good is to changes in its price. There are different levels of demand elasticity:
a. Inelastic demand: When the demand for a good is inelastic, it means that consumers are not very responsive to changes in price. In other words, even if the price of wheat increases or decreases, the quantity demanded doesn't change significantly. Therefore, an inelastic demand for wheat would suggest that farmers in Kansas wouldn't benefit much from a crop failure in North Dakota.
b. Elastic demand: When the demand for a good is elastic, it means that consumers are highly responsive to changes in price. If the price of wheat were to increase due to a crop failure in North Dakota, consumers would likely decrease their demand for wheat and look for alternative, cheaper substitutes. In this case, farmers in Kansas would benefit from the increased demand and higher prices.
c. Unit elastic demand: Unit elastic demand refers to a situation where the percentage change in quantity demanded is exactly equal to the percentage change in price. This means that the increase in price caused by a crop failure in North Dakota would result in an equal decrease in quantity demanded. In this scenario, the overall impact on farmers in Kansas would depend on factors such as their production costs and ability to adjust supply accordingly.
d. Downward sloping demand: This term describes the typical shape of a demand curve, where higher prices correspond to lower quantities demanded, and vice versa. It does not directly indicate the elasticity of demand.
e. Perfectly elastic demand: This occurs when a very small price change leads to an infinite change in quantity demanded. In other words, consumers are extremely sensitive to price changes. Perfectly elastic demand is unlikely for agricultural commodities like wheat.
To determine which of the options (a, b, c, d, or e) is the most appropriate answer, we need information about the elasticity of demand for wheat in the U.S. This information can be obtained through economic studies, surveys, or analysis of historical data.