Ques 2.The domestic demand for wheat is 2DD=1000-25P, andthe export demand is QDE = 500 – 25P.Draw the domestic, export, and aggregate demand curves for wheat. Label the intercepts and thekink point.Ques 3.#Let's say John allocates his income amounting to $240 between sushi and canned tuna. Let unitprice of sushi be $20 and unit price of canned tuna be $12.a) Draw the budget line.b) Now suppose price of canned tuna decreases to $6. Draw the new budget line.c) Draw two indifference curves. The first should be tangent to the old budget line and thesecond should be tangent to the new budget line (tangency points represent the two points ofconsumption for John where utility is maximized before and after the price change) such thatcanned tuna is an inferior but not a Giffen good. In the figure, show the income, substitutionand total effects.If

The total demand is calculated by adding the individual demand curves horizontally. Here, the demand…

Answered: The domestic demand for wheat is C e…

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The domestic demand for wheat is C e export demand is QDE=500-2 Draw the domestic, export, and aggr

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter5: Markets In Motion And Price Controls

Section: Chapter Questions

Problem 9P

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Question

Ques 2.
The domestic demand for wheat is 2DD=1000-25P, and
the export demand is QDE = 500 – 25P.
Draw the domestic, export, and aggregate demand curves for wheat. Label the intercepts and the
kink point.
Ques 3.
#Let's say John allocates his income amounting to $240 between sushi and canned tuna. Let unit
price of sushi be $20 and unit price of canned tuna be $12.
a) Draw the budget line.
b) Now suppose price of canned tuna decreases to $6. Draw the new budget line.
c) Draw two indifference curves. The first should be tangent to the old budget line and the
second should be tangent to the new budget line (tangency points represent the two points of
consumption for John where utility is maximized before and after the price change) such that
canned tuna is an inferior but not a Giffen good. In the figure, show the income, substitution
and total effects.
If

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