\fQuestion 1 1 pts Consider the information in the le called HW4 Corn Market. Currently: Equilibrium price = dollars per bushel Equilibrium quantity = billion bushels Consumer surplus = billion dollars Producer surplus = billion dollars Total consumer expenditure on corn = billion dollars Total revenue received by corn farmers = billion dollars Question 2 2 pts Consider the information in the file called HW4 Corn Market. Suppose that the aggregate amount of xed cost incurred by all the farmers combined equals $3 billion {loan payments to banks, insurance payments. rent on land. etc.) Then, currently: Aggregate revenue earned by corn farmers {from previous question) = billion dollars. Aggregate variable cost of production faced by com farmers = billion dollars. Aggregate total cost of production faced by com farmers = billion dollars. Economic profit earned by all the corn farmers combined = billion dollars Question 3 2 pts Consider the information in the le called HW4 Corn Market. Oil prices increase due to some political problems in middle east. This causes the marginal cost of producing each bushel of corn to increase by $3.00. This is because, oil is used to produce gasoline that farmers use to operate tractors. groundwater water pumps, and other farming equipment. This number may. of course, be unrealistic. But, it will make the graph less messy and calculations less cumbersome. Calculate the following: The new equilibrium price of corn = dollars per bushel The new equilibrium quantity of corn = billion bushels New consumer surplus = billion dollars. New producer surplus = billion dollars. The point? This question illustrates how an increase in oil prices could cause what is called stagation: reductions in productions of many goods (stagnation) and increases in prices (ination). Who would think increases in gas prices could affect the prices and quantities of agricultural products!? Question 4 2 pts Consider the information in the file called HW4 Corn Market. Forget about the increase in oil prices. Suppose this time that to mitigate global warming and to reduce air pollution coming from gasoline consumption. the government encourages the production of ethanol. Corn is an input into ethanol production. Therefore, the government's policy causes demand for corn to increase by 1.50 billion bushels. Calculate the following: The new equilibrium price of corn = dollars per bushel The new equilibrium quantity of corn = billion bushels The point? The question illustrates secondary impacts of government policies in different industries through inter-market interactions. Did you know that policies to mitigate global warming could increase corn prices adversely affecting the poor? Question 5 1 pts Consider the information in the le called HW4 Corn Market. This time combine the previous two cases. Suppose that marginal cost of production increases by $3.00 per bushel clue to the increase in oil prices and demand for corn increases by 1.50 billion bushels to produce ethanol. Calculate the following: The new equilibrium price of corn = dollars per bushel The new equilibrium quantity of corn = billion bushels