1. Assume two countries, the U.S (US) and Japan (J), have one good: cars. Thedemand (d) and supply (s) functions for cars in the U.S. and Japan are described by the following functions: 1 Qd = 30-5 %3D Qs! = -4+ P Qdus = 40 - P %3D Qsus = -10 + 2P %3D Pis the price measured in a common currency used in both countries, such as the U.S. dollar. a. Compute the equilibrium price (P) and quantities (Q) in each country without trade b. Now assume that free trade occurs. The free-trade price goes to 50 U.S. dollars. Who exports and imports cars and in what quantities? 2. You have the responsibility of managing trade policy in Jamaica. The Jamaicanexport market for coffee is new and developing, i.e., Jamaica coffee is an infant industry. Jamaica coffee producers are requesting tariff protection from cheap Brazilian coffee. Whattypes of policies will you enact? Explain. 3. Does international trade, taken as a whole, increase the total number of jobs,decrease the total number of jobs, or leave the total number of jobs about the same? Hint: Provide your answer (with reasoning) based on what you expect under the partial equilibrium model for the exporting country, the importing country, and the net overall effect on the world.
1. Assume two countries, the U.S (US) and Japan (J), have one good: cars. Thedemand (d) and supply (s) functions for cars in the U.S. and Japan are described by the following functions: 1 Qd = 30-5 %3D Qs! = -4+ P Qdus = 40 - P %3D Qsus = -10 + 2P %3D Pis the price measured in a common currency used in both countries, such as the U.S. dollar. a. Compute the equilibrium price (P) and quantities (Q) in each country without trade b. Now assume that free trade occurs. The free-trade price goes to 50 U.S. dollars. Who exports and imports cars and in what quantities? 2. You have the responsibility of managing trade policy in Jamaica. The Jamaicanexport market for coffee is new and developing, i.e., Jamaica coffee is an infant industry. Jamaica coffee producers are requesting tariff protection from cheap Brazilian coffee. Whattypes of policies will you enact? Explain. 3. Does international trade, taken as a whole, increase the total number of jobs,decrease the total number of jobs, or leave the total number of jobs about the same? Hint: Provide your answer (with reasoning) based on what you expect under the partial equilibrium model for the exporting country, the importing country, and the net overall effect on the world.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Please answer letter b, and number 2 and 3
![**Thomas-Winston**
1. Assume two countries, the U.S. (US) and Japan (J), have one good: cars. The demand (d) and supply (s) functions for cars in the U.S. and Japan are described by the following functions:
\[
Q^d_J = 30 - \frac{1}{2}P
\]
\[
Q^s_J = -4 + P
\]
\[
Q^d_{US} = 40 - P
\]
\[
Q^s_{US} = -10 + 2P
\]
\( P \) is the price measured in a common currency used in both countries, such as the U.S. dollar.
a. Compute the equilibrium price (P) and quantities (Q) in each country without trade.
b. Now assume that free trade occurs. The free-trade price goes to 50 U.S. dollars. Who exports and imports cars and in what quantities?
2. You have the responsibility of managing trade policy in Jamaica. The Jamaican export market for coffee is new and developing, i.e., Jamaica coffee is an infant industry. Jamaica coffee producers are requesting tariff protection from cheap Brazilian coffee. What types of policies will you enact? Explain.
3. Does international trade, taken as a whole, increase the total number of jobs, decrease the total number of jobs, or leave the total number of jobs about the same?
*Hint*: Provide your answer (with reasoning) based on what you expect under the partial equilibrium model for the exporting country, the importing country, and the net overall effect on the world.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F375a2942-3f8b-4320-9caa-cc2588edb1a6%2F497da277-b017-4c2d-b55e-d0c528c9692c%2Fnaaxwu_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Thomas-Winston**
1. Assume two countries, the U.S. (US) and Japan (J), have one good: cars. The demand (d) and supply (s) functions for cars in the U.S. and Japan are described by the following functions:
\[
Q^d_J = 30 - \frac{1}{2}P
\]
\[
Q^s_J = -4 + P
\]
\[
Q^d_{US} = 40 - P
\]
\[
Q^s_{US} = -10 + 2P
\]
\( P \) is the price measured in a common currency used in both countries, such as the U.S. dollar.
a. Compute the equilibrium price (P) and quantities (Q) in each country without trade.
b. Now assume that free trade occurs. The free-trade price goes to 50 U.S. dollars. Who exports and imports cars and in what quantities?
2. You have the responsibility of managing trade policy in Jamaica. The Jamaican export market for coffee is new and developing, i.e., Jamaica coffee is an infant industry. Jamaica coffee producers are requesting tariff protection from cheap Brazilian coffee. What types of policies will you enact? Explain.
3. Does international trade, taken as a whole, increase the total number of jobs, decrease the total number of jobs, or leave the total number of jobs about the same?
*Hint*: Provide your answer (with reasoning) based on what you expect under the partial equilibrium model for the exporting country, the importing country, and the net overall effect on the world.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 5 images
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education