5. Demand and Supply - Begin each question with a graph showing the following: the market clears at price of $10 a bushel for corn and at a quantity of 100 million bushels – assume perfectly flexible prices. a. If there was an innovation machinery that plant and harvest corn, what would happen to the price of corn? Would this lead to a surplus or shortage? b. If the Centers for Disease Control reported that nachos made with corn chips reduced life expectancy by five years, what would happen to the price of corn? Will this lead to surplus or shortage? c. What would likely happen to the price of corn if the economy entered a sever recession (with high unemployment) and at the same time corn farmers experienced massive loss due to flooding? Andquantity? d. If both suppliers and consumers thought the price of corn was going to fall in the future, what impact would it have on prices and quantity today?

5. Demand and Supply - Begin each question with a graph showing the following: the market clears at price of $10 a bushel for corn and at a quantity of 100 million bushels – assume perfectly flexible prices. a. If there was an innovation machinery that plant and harvest corn, what would happen to the price of corn? Would this lead to a surplus or shortage? b. If the Centers for Disease Control reported that nachos made with corn chips reduced life expectancy by five years, what would happen to the price of corn? Will this lead to surplus or shortage? c. What would likely happen to the price of corn if the economy entered a sever recession (with high unemployment) and at the same time corn farmers experienced massive loss due to flooding? Andquantity? d. If both suppliers and consumers thought the price of corn was going to fall in the future, what impact would it have on prices and quantity today?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 6QR

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