Unit 3 Assignment

Unit 3 Homework - Template 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 | 700 | $35 | 600 | $30 | 500 | $25 | 400 | $20 | 300 |

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) | Quantity of Belgium cocoa beans demanded(pounds) | $40 | 100 | $35 | 300 | $30 | 500 | $25 | 700 | $20 | 900 |

a. Draw the demand curve and the supply curve for Belgium cocoa beans. What are the equilibrium price and quantity of cocoa beans from Belgium? . . . . . |

$40

$35

$30

$25

$20 700 600 500 400 300

The equilibrium price and quantity of cocoa beans from Belgium is $30.00 / 500 pounds

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) | Quantity of Belgium cocoa beans demanded(pounds) | $40 | 200 | $35 | 400 | $30 | 600 | $25 | 800 | $20 | 1000 |

b. What is the demand schedule for Belgium cocoa beans now that U.S. consumers can also buy them?

Price of Belgium cocoa beans | Quantity of Belgium cocoa beans demanded | 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 | |

Draw a supply and demand diagram that illustrates the new equilibrium price and quantity of cocoa beans from Belgium.

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