Page 52 - Microeconomics, Fourth Edition

c02demandandsupplyanalysis.qxd 6/14/10 1:39 PM Page 26

2 DEMAND AND SUPPLY

2.1 ANALYSIS
DEMAND, SUPPLY, AND MARKET APPLICATION 2.1 The Valentine’s Day Effect
EQUILIBRIUM APPLICATION 2.2 A Computer on Every Desk
and in Every Home
2.2
PRICE ELASTICITY OF DEMAND APPLICATION 2.3 How People Buy Cars: The
Importance of Brands
2.3

OTHER ELASTICITIES APPLICATION 2.4 How People Buy Cars: The
Importance of Price
APPLICATION 2.5 Coke versus Pepsi
2.4
ELASTICITY IN THE LONG RUN APPLICATION 2.6 Crude Oil: Price and Demand
VERSUS THE SHORT RUN

2.5

BACK-OF-THE-ENVELOPE APPLICATION 2.7 What Hurricane Katrina Tells Us
CALCULATIONS about the Price Elasticity of Demand for Gasoline
APPLICATION 2.8 The California Energy Crisis
APPENDIX
PRICE ELASTICITY OF DEMAND
ALONG A CONSTANT ELASTICITY
DEMAND CURVE

What Gives with the Price of Corn?

Corn is one of the most important agricultural products in the United States. It is used to make many
food and industrial products we encounter in our daily lives, such as corn oil, sweeteners, and alcohol.
In recent years, especially with increasing prices of gasoline and oil, it has attracted increasing attention
because it may be used to produce the fuel ethanol.

26