Question
Question 1 ( 7 Marks) The 2019/20 Australia Bushfires affected food production nearly in New South Wales, Queensland and Victoria that are regarded as the
Question 1 ( 7 Marks)
The 2019/20 Australia Bushfires affected food production nearly in New South Wales, Queensland and Victoria that are regarded as the food basket for Australia. Assume that before, the bushfire, in 2017/18 Australia produced 80,000 metric tons. Also, assuime that after the bushfire devastation in 2019/20 Australia produced 50,000 metric tons of rice. Finally, assume that during the same period 2017/18 and 2019/20 the price rice in Australia rose from AUD 1.75 per kg to AUD 3.00 per kg respectively. Use the Demand and Supply Model below to answer the questions that follow.
- Use the Demand and Supply Model above to explain the impact of the bushfires on the rice market in New South Wales. 3 Marks
ANSWER: ** Answer box will enlarge as you type
- Use the mid-point approach to calculate the price elasticity of demand for rice in Australia. 3 Marks
ANSWER:
What is the price elasticity of demand for rice? Based on your answer, is rice a necessity commodity? Explain your answer.
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Microeconomics
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
1st Edition
978-1464146978, 1464146977
