Ef5

Page 4 5. [General Equilibrium - Farm Stuff] Because economics is a really old science, we still use a lot of agricultural examples. For instance, the supply of beans (in millions of bushels) is given by Q5 = 2Pb + Pc. The supply of corn is given by Q2 = 2Pc + 2Pp. The demand for beans is Q% = 40 - Pb. The demand for corn is Q& = 40 - Pc. a. Solve the general equilibrium price and quantity for both beans and corn. b. How are these two goods related? (substitutes or complements? In production and/or consumption?) Why