. With no international trade, what would be the price of a semiconductor, and how many semiconductors a year would be bought and sold in the United States? b.Does the United States have a comparative advantage in producing semiconductors? c. Draw a graph (the graph is for your own reference, not required to be attached in the answer sheet)to illustrate the U.S. supply and demand market for semiconductors. What is the price with free international trade? What is the quantity of semiconductors produced in the U.S.and total quantity bought by U.S. people and the quantity exported from other countries?
A semiconductor is a key component in your laptop, cell phone, and iPod. The table provides information about the market for semiconductors in the United States. Producers of semiconductors can get $18 a unit on the world market.
PRICE ( DOLLAR PER UNIT) |
QUANTITY DEMANDED (billions of units per year) |
QUANTITY SUPPLIED (billions of unit per year) |
10 | 25 | 0 |
12 | 20 | 20 |
14 | 15 | 40 |
16 | 10 | 60 |
18 | 5 | 80 |
20 | 0 | 100 |
a. With no international trade, what would be the price of a semiconductor, and how many semiconductors a year would be bought and sold in the United States?
b.Does the United States have a
c. Draw a graph (the graph is for your own reference, not required to be attached in the answer sheet)to illustrate the U.S.
d. Due to the loss of competitiveness brought on by appreciation of the exchange rate and the high production costs, U.S.government reduce the export(or limit the supply of domestic producers) by imposing an export quota of 20 billion units per year. What happens to the U.S. price of semiconductors, the number of semiconductors bought by U.S. people, and the quantity of semiconductors exported? use the equation to calculate the equilibrium
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