1. Assume the US market of sunflower oil was described by the following domestic supply and demand equations: QDUS = 8000 - 4 P and QSUS = -2000 + 6 P where QDUS and QSUS represent the quantities demanded and supplied (in billions of metric tons) and P is the price per metric ton of sunflower oil (in $). What was the market price of sunflower oil?
2. $1000
3. $1100
4. $800
5. $1200

5 points

QUESTION 2

1. Assume the US market of sunflower oil was described by the following domestic supply and demand equations: QDUS = 8000 - 4 P and QSUS = -2000 + 6 P where QDUS and QSUS represent the quantities demanded and supplied (in billions of metric tons) and P is the price per metric ton of sunflower oil (in $). Using your work in question 1, what was the market quantity of sunflower oil?
2. 3000 tons
3. $4500 tons
4. 4000 tons
5. $3400 tons

5 points

QUESTION 3

1. Assume the US market of sunflower oil was described by the following domestic supply and demand equations: QDUS = 8000 - 4 P and QSUS = -2000 + 6 P where QDUS and QSUS represent the quantities demanded and supplied (in billions of metric tons) and P is the price per metric ton of sunflower oil (in $). Using your work in questions 1 and 2, what were revenues for the suppliers of sunflower oil?
2. $3,500,000
3. $2,720,000
4. $4,000,000
5. $4,500,000

5 points

QUESTION 4

1. Assume the US market of sunflower oil was described by the following domestic supply and demand equations: QDUS = 8000 - 4 P and QSUS = -2000 + 6 P where QDUS and QSUS represent the quantities demanded and supplied (in billions of metric tons) and P is the price per metric ton of sunflower oil (in $). Now add this information: In 2008, China entered into the World Trade Organization and became the largest importer of US sunflower oil. Assume the Chinese import demand for sunflower oil from the US in 2008 was QDCHINA = 20000 - 10 P Given this information, what was the new equilibrium price of sunflower oil in 2008? (Hint: what is the total demand for US sunflower oil?)
2. $1600
3. $1400
4. $1000
5. $1500

5 points

QUESTION 5

1. Assume the US market of sunflower oil was described by the following domestic supply and demand equations: QDUS = 8000 - 4 P and QSUS = -2000 + 6 P where QDUS and QSUS represent the quantities demanded and supplied (in billions of metric tons) and P is the price per metric ton of sunflower oil (in $). Now add this information: In 2008, China entered into the World Trade Organization and became the largest importer of US sunflower oil. Assume the Chinese import demand for sunflower oil from the US in 2008 was QDCHINA = 20000 - 10 P Given the price you calculated in question 4, what was the equilibrium total quantity demanded?
2. 8000 tons
3. 7000 tons
4. 6000 tons
5. 5000 tons

5 points

QUESTION 6

1. Assume the US market of sunflower oil was described by the following domestic supply and demand equations: QDUS = 8000 - 4 P and QSUS = -2000 + 6 P where QDUS and QSUS represent the quantities demanded and supplied (in billions of metric tons) and P is the price per metric ton of sunflower oil (in $). Now add this information: In 2008, China entered into the World Trade Organization and became the largest importer of US sunflower oil. Assume the Chinese import demand for sunflower oil from the US in 2008 was QDCHINA = 20000 - 10 P Given your answers in questions 4 and 5, how much of that quantity was consumed in the US (i.e., US quantity demanded)?
2. 5000 tons
3. 4000 tons
4. 2000 tons
5. 3000 tons

5 points

QUESTION 7

1. Assume the US market of sunflower oil was described by the following domestic supply and demand equations: QDUS = 8000 - 4 P and QSUS = -2000 + 6 P where QDUS and QSUS represent the quantities demanded and supplied (in billions of metric tons) and P is the price per metric ton of sunflower oil (in $). Now add this information: In 2008, China entered into the World Trade Organization and became the largest importer of US sunflower oil. Assume the Chinese import demand for sunflower oil from the US in 2008 was QDCHINA = 20000 - 10 P Given your answers in questions 4-6, how much sunflower oil did China purchase from US producers? (i.e., China quantity demanded)
2. 5000 tons
3. 4000 tons
4. 2000 tons
5. 3000 tons

5 points

QUESTION 8

1. Assume the US market of sunflower oil was described by the following domestic supply and demand equations: QDUS = 8000 - 4 P and QSUS = -2000 + 6 P where QDUS and QSUS represent the quantities demanded and supplied (in billions of metric tons) and P is the price per metric ton of sunflower oil (in $). Now add this information: In 2008, China entered into the World Trade Organization and became the largest importer of US sunflower oil. Assume the Chinese import demand for sunflower oil from the US in 2008 was QDCHINA = 20000 - 10 P Given your calculations in questions 4-7, what were US sunflower oil producer revenues?
2. $10,500,000
3. $16,000,000
4. $17,000,000
5. $18,000,000

5 points

QUESTION 9

1. The extended demand function of good X is: QDX = 1200 - 10 PX + 20 PY + 0.25 M where: QDX = quantity demanded of good X, PX = Price of good X, M = Average consumer income, and PY = Price of related good Y (related in consumption to good X). If M = 20,000, PY = 10, and PX = 400; then QDX = __? and if M = 20,000, PY = 10, and PX = 420 then QDX = __?
2. 2900, 2800
3. 2800, 2700
4. 2400, 2200
5. 2800, 3800

5 points

QUESTION 10

1. The extended demand function of good X is: QDX = 1200 - 10 PX + 20 PY + 0.25 M where: QDX = quantity demanded of good X, PX = Price of good X, M = Average consumer income, and PY = Price of related good Y (related in consumption to good X). In problem 9, you calculated QDX if M = 20,000, PY = 10, and PX = 400 and you calculated QDX if M = 20,000, PY = 10, and PX = 420. Using the two prices for PX and your calculated two quantities demanded of good (QDX), what is the value of the price elasticity of demand between these two points on the demand curve for good X (using the arc elasticity formula).
2. -1.537
3. -1.230
4. -1.783
5. -1.872

5 points

QUESTION 11

1. If the value of the price elasticity of X is -0.45, then a price decrease of X will
2. decrease revenues for the suppliers of X
3. increase revenues for the suppliers of X
4. will not affect revenues for the suppliers of X
5. will increase or decrease revenues for the suppliers of X

5 points

QUESTION 12

1. Assume that if M = 20,000, then QdX = 2400, and if M = 30,000, then QdX = 4900. Use these two income levels and quantities demanded of X to calculate the value of the income elasticity of demand.
2. 0.71
3. 1.71
4. 1.36
5. -0.71

5 points

QUESTION 13

1. Based on your answer in question 12, good X is what type of good?
2. inferior
3. substitute
4. elastic
5. normal

5 points

QUESTION 14

1. Assume that if PY = 10, then QdX = 2400, and if PY = 5, then QdX = 2300. Use these two prices of good Y (PY) and the two quantities demanded of good X (QDX) to calculate the cross-price elasticity of the demand of good X when the price of good Y decreases from 10 to 5.
2. -0.79
3. 0.06
4. 0.87
5. -0.87

5 points

QUESTION 15

1. Based on your answer to question 14, goods X and Y are:
2. inelastic
3. complements
4. inferior
5. substitutes

5 points

QUESTION 16

1. The price elasticity of demand of good X is -1.5. An increase in the price of good X will
2. Decrease revenues for the suppliers of good X
3. Increase revenues for the suppliers of good X
4. Not affect revenues for the suppliers of good X
5. Increase or decrease revenues for the suppliers of food X

5 points

QUESTION 17

1. The price elasticity of demand of good X is -0.8. An increase in the price of good X will
2. Decrease revenues for the suppliers of good X
3. Increase revenues for the suppliers of good X
4. Not affect revenues for the suppliers of good X
5. Increase or decrease revenues for the suppliers of food X

5 points

QUESTION 18

1. Assume that the cross-price elasticity of demand for good X with respect to the price of good Y is 0.2. Based on this, we can say that goods X and Y are ___?
2. Complementary goods
3. Independent goods
4. Both inferior goods
5. Substitute goods

5 points

QUESTION 19

1. If the income elasticity of the demand for good X is -0.4, good X must be what type of good?
2. Inferior
3. Independent
4. Substitute
5. Normal

5 points

QUESTION 20

1. Assume that the income elasticity of good X is 1.8. This means that a 10% increase in income will _______ the sales of good X by __% ?
2. Decrease, 18%
3. Increase, 18%
4. Increase, 0.8%
5. Decrease, 0.8%