ABIZ 1010: ECONOMICS OF GLOBAL FOOD ISSUES AND POLICIES TOPIC 2 - ICE 3 Duration: 30 Minutes Section: Marks Received: (out of 10) Full Name: ID: NOTE: ALL FINAL ANSWERS SHOULD BE ROUNDED TO TWO DECIMAL PLACES 1. The Cozy Orange Company believes that it can sell 200 tons of orange at $250 per ton or 300 tons at $150 per ton. Using the midpoint formula, what do they think is the price elasticity of demand? Is it Price elastic/Price Inelastic/Unit Price Elastic? (3.5 Marks) ( Q2 - Q1) (300 - 200) ( Q2 + 21) / 2 AQ (300 + 200)/2 100 200 AP X = = (150 - 250) -100 2501 = [-0.81 = 0. 80 (Price Inlastic) ( P2 - P1) (P2 + P1) / 2 (150 + 250)/, 2. If your purchases of oranges increase from 9 units to 13 units per year when the price of apple increases from $8 to $10, all other things equal, for you, what is the cross-price elasticity between oranges and apple? Are those goods substitute, complement, or unrelated? (3.5 Marks) 6:27 AM 6/8/2022 5