AGEC 315 HW2 Complete Answers
Scenario 1: Assume that demand increases as projected by the FAO. This would lead to a 60% increase in
demand from 2010 to 2050. Another conventional assumption is that land area used for crops will
increase by roughly 11% during the period and yields will increa...
Scenario 1: Assume that demand increases as projected by the FAO. This would lead to a 60% increase in
demand from 2010 to 2050. Another conventional assumption is that land area used for crops will
increase by roughly 11% during the period and yields will increase by 1.25% per year leading to a 64%
total increase in yields. In total, this implies an 82% increase in supply from 2010 to 2050.
Assume that the elasticity of demand is -0.1 and the elasticity of supply is 0.2.Using these parameters,
what is the percent change in the price of food from 2010 to 2050?
Note: Enter your answer in percentage form rounding to 1 decimal place and use positive numbers to
indicate an increase in price and negative numbers to indicate a decrease in price. For example, if price
decreases by 5.137%, then enter -5.1 as your answer.
What would this graph look like? ✔️60-82/0.2+0.1= -73.3
Major increase in supply. Major increase in demand. Which results in a slight decrease in price since it is
a negative number.
Scenario 2: Assume that demand increases 60% as before. But now instead assume that yields only
increase at an annual rate of 0.5% and land used for food does not change. This implies a total increase
in supply of 22% from 2010 to 2050. Yields may grow slower due to climate change, soil erosion,
decreased research expenditures, or lack of irrigation water. Land used for food may not increase
because land expansion is restricted to mitigate climate change or because some land is lost from soil
degradation.
Assume that the elasticity of demand is -0.1 and the elasticity of supply is 0.3.Using these parameters,
what is the percent change in the price of food from 2010 to 2050?
Note: Enter your answer in percentage form rounding to 1 decimal place and use positive numbers to
indicate an increase in price and negative numbers to indicate a decrease in price. For example, if
pricedecreases by 5.137%, then enter -5.1 as you ✔️60-22/0.3+0.1= 95
Major increase in demand. Slight increase in supply. Results in a major price increase.
Scenario 3: Assume that supply increases as in the first scenario for a total increase in supply of 82%. But
now instead assume that demand increases faster than projected and increases by 100% from 2010 to
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