1. Suppose that a small, tropical country produces mangoes for domestic consumption and possibly for export. The national demand and supply curves for mangoes in this country are given by the following: P = 50 - M (national demand) (national supply) P = 25 + M where P denotes the relative price of mangoes and M denotes the quantity of mangoes (in metric tons). (a) Illustrate these relationships geometrically. (b) What is the autarky price and quantity exchanged? (c) Suppose that the world price of mangoes is 45. Will this small country export mangoes? If so, so, how many tons?

1. Suppose that a small, tropical country produces mangoes for domestic consumption and possibly for export. The national demand and supply curves for mangoes in this country are given by the following: P = 50 - M (national demand) (national supply) P = 25 + M where P denotes the relative price of mangoes and M denotes the quantity of mangoes (in metric tons). (a) Illustrate these relationships geometrically. (b) What is the autarky price and quantity exchanged? (c) Suppose that the world price of mangoes is 45. Will this small country export mangoes? If so, so, how many tons?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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