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AB224-Unit 3 Assignment: Problem 1 and 2




Question;Name: -Teresa Webb;Course Number: -AB224;Section Number: -03;Unit Number: - 3;Date: -8/16/2013;Problem 1;Suppose;that the supply schedule of Belgium Cocoa beans is as follows;Price of cocoa beans;(per pound);Quantity of cocoa beans;supplied;(pounds);$40;900;$35;700;$30;500;$25;400;$20;200;Suppose;that Belgium cocoa beans can be sold only in Europe. The European demand schedule;for Belgium cocoa beans is as follows;Price of Belgium cocoa;beans;(per pound);European Quantity of;Belgium cocoa beans demanded;(pounds);$40;100;$35;300;$30;500;$25;700;$20;900;a. Below;is the graph of the demand curve and the supply curve for Belgium cocoa beans. From;the supply and demand schedules above, what are the equilibrium price and;quantity of cocoa beans from Belgium?;Now suppose that Belgium cocoa;beans can be sold in the U.S. The U.S. demand schedule for Belgium cocoa beans;is as follows;Price of Belgium cocoa;beans;(per pound);U.S. Quantity of Belgium;cocoa beans demanded;(pounds);$40;200;$35;400;$30;600;$25;800;$20;1000;b. What is;the combined (total) demand schedule for Belgian cocoa beans that European and;USA consumers buy?;Price of Belgium cocoa beans;U.S. Quantity of Belgium cocoa beans;demanded;European Quantity of Belgium cocoa beans;demanded;Total Demanded;(per pound);(pounds);(pounds);(pounds);$40;200;100;$35;400;300;$30;600;500;$25;800;700;$20;1000;900;Below;is the supply and demand graph that illustrates the new equilibrium price and;quantity of cocoa beans from Belgium.;c. From the;supply schedule and the combined U.S. and European demand schedule, what will be;the new price at which Belgium plantation owners can sell cocoa beans?;d. What price;will be paid by European consumers?;e. What will be;the quantity consumed by European consumers?;European consumers will consume 500;pounds of cocoa beans.;Problem;2;On Tuesday nights, a;local restaurant has a kid?s meal special. Nina?s son, Braden likes the;restaurant?s chicken nuggets, but Braden seems to be growing bigger every day;and the kid?s meal is usually not enough. The restaurant does allow for;additional purchase of chicken nugget servings. Nina?s willingness to pay for;each serving is shown in the table below.;Number of Chicken Nugget;servings;(servings);Willingness to pay for;chicken nuggets;(per serving);1;$5;2;$4;3;$3;4;$2;5;$1;6;$0;a.If the price of an;additional serving of chicken nuggets is $3, how many servings will Nina buy;for Braden? How much consumer surplus does he receive?;b.The;following week, Nina and Braden are back at the restaurant again, but now the;price of a serving of chicken nuggets is $4. By how much does his consumer;surplus decrease compared to the previous week?;c.One week;later, they return to the restaurant again. Nina discovers that the restaurant;is offering an ?all-you-can-eat? special for $12. How many chicken nugget;servings will Braden eat, and how much consumer surplus does he receive now?;d.Suppose;you own the restaurant and Braden is a ?typical? customer. What is the highest;price you can charge for the ?all-you-can-eat? special and still attract;customers?;Grading;Rubric;Microeconomics;Unit 3 Assignment: Supply and Demand Curves, Consumer Surplus;Content;Points;Possible;Points;Earned;Problem 1: Supply and Demand Curves;?;Used the demand and supply curve graph and the demand and;supply schedules given for problem 1a to determine the equilibrium price;?;Used the demand and supply curve graph and the demand and;supply schedules given for problem 1a to determine the equilibrium quantity.;?;Completed the chart by providing the combined (total) demand;schedule at the various levels given for problem 1b.;?;Determined the new price based on the supply schedule and;combined U.S. and European demand schedule given for problem 1c.;?;Determined the price that will be paid by European consumers for;problem 1d.;?;Determined the quantity consumed by European consumers for;problem 1e.;12;Problem 2: Consumer Surplus;?;Determined how many servings Nina is willing to buy for;Braden and the consumer surplus for problem 2a.;?;Determined how much the consumer surplus decreased compared to;the previous week for problem 2b.;?;Determined how many servings Braden will eat and for problem 2c.;?;Determined the highest price that could be charged and still;attract the consumer surplus for problem 2d.;8;Writing(5 pts);Correct;use of APA 6th edition format, all sources used to support the;paper are referenced;2;Sentences;are clear, concise, and direct, tone is appropriate, spelling, grammar, and punctuation;are correct.;3;Total;25


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