Answer to Question #331414 in Microeconomics for Jack

Question

1． Draw the figure of the market equilibrium for the wheat market. Show what will happen if pesticide cost increases.

2. Consider a consumer who has $100. The price for food is $1 /unit. The price for clothing is $2 /unit. Draw the budget line for this consumer. And draw a new budget line when the consumer’s wealth increased to $200 and the price of clothing increased to $4 /unit.

3. The demand curve is p=10-q. Calculate the consumer surplus and the total expenditure if the market price is 6. Calculate the consumer surplus again if the market price is 4.

Answer 1

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