2. Korea's demand for computers isQK = 2,000- pk,%3DIts supply isQK = -200 + pK.China's demand for computers isQ° = 1, 000 – PC.%3DIts supply isQC = PC.a. Both countries are trading with each other. Assume that there isno transportation cost. Find the world equilibrium price and thevolume of trade.b. Suppose that Korea imposes a specific tariff of $100 on computerimports. Calculate the price of computers in each country and thequantity of computers supplied and demanded in each country. Alsocalculate the volume of trade.c. Suppose that Korea imposes a 20% ad valorem tariff on computerimports. Calculate the price of computers in each country and thequantity of computers supplied and demanded in each country. Alsocalculate the volume of trade.

In Korea : Demand function : Qk = 2000 - Pk Supply function : Qk = - 200 + Pk In China : Demand…

Answered: 2. Korea's demand for computers is QK =…

2. Korea's demand for computers is QK = 2, 000- pk. Its supply is QK = -200 + pK. %3D China's demand for computers is Q° = 1,000 – PC. %3D

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

2. Korea's demand for computers is
QK = 2,000- pk,
%3D
Its supply is
QK = -200 + pK.
China's demand for computers is
Q° = 1, 000 – PC.
%3D
Its supply is
QC = PC.
a. Both countries are trading with each other. Assume that there is
no transportation cost. Find the world equilibrium price and the
volume of trade.
b. Suppose that Korea imposes a specific tariff of $100 on computer
imports. Calculate the price of computers in each country and the
quantity of computers supplied and demanded in each country. Also
calculate the volume of trade.
c. Suppose that Korea imposes a 20% ad valorem tariff on computer
imports. Calculate the price of computers in each country and the
quantity of computers supplied and demanded in each country. Also
calculate the volume of trade.

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