3. (25 marks) Suppose in a domestic market of a certain product with perfect competition, thedomestic market demand curve is Qd = 10 -0.5P, and the domestic market supply curve is(-2+P, if P≥2Qs =10,Please use graph(s) to answer the questions below.if P < 2(1) Suppose the government allows free trade in the domestic market, and the world price (Pw)is at $3. What are the consumer surplus and producer surplus?(2) Suppose now the government wants to protect domestic producers and placed a $2 tariff onevery unit of product imported. What are the consumer surplus, producer surplus, revenuesreceived from the tariff by the government, and the deadweight loss compared to the free tradescenario?

Detailed explanation: Consumer Surplus (CS): Consumer surplus represents the difference between what…

Answered: 3. (25 marks) Suppose in a domestic…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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R Imagine that it costs $40 in the United States to produce one ton of soybeans and transport them to market, while it costs $30 in Brazil to produce one ton of soybeans and transport them to market Imagine that it costs $20,000 in the United States to produce one automobile and transport it to maket, while costs $10,000 in Brazil to produce one automobile and transport it to market. Which of the following four arrangements would be most efficient? (Hint: Derived OC from PPF (production) = 1/OC derived from costs to make ) a. The United States should produce everything, since it can produce both soybeans and automobiles better than Brazil can produce them. Ob. Brazil should specialize and produce only automobiles. The United States should specialize and produce only soybeans. Then the two countries should trade with each other. Brazil will send automobiles to the United States, while the United States sends soybeans to the Brazil. Oc. The United States should specialize and produce…
A large share of the world supply of diamonds comes from Russia and South Africa. Suppose that the marginal cost of mining diamonds is constant at $3,000 per diamond, and the demand for diamonds is described by the following schedule: see attached If there were many suppliers of diamonds, the price would be $________per diamond and the quantity sold would be __________diamonds. If there were only one supplier of diamonds, the price would be _________per diamond and the quantity sold would be_________diamonds. Suppose Russia and South Africa form a cartel. In this case, the price would be _________________per diamond and the total quantity sold would be __________diamonds. If the countries split the market evenly, South Africa would produce_____________diamonds and earn a profit of. If South Africa increased its production by 1,000 diamonds while Russia stuck to the cartel agreement, South Africa's profit would _increase or decrease________ to. Why…
My dear hero expert bro and pro Hand written solution is not allowed.
1. Chapter 10 (a) In a pure exchange economy with two goods, G and H, the two traders have Cobb-Douglas utility functions. Suppose that Tony's utility function is U₁ = G, H, and Margaret's utility function is Um Gm (Hm)2. Between them, they own 100 units of G and 50 units of H. Solve for their contract curve. determine p, the competitive price of G, where the price of (b) = H is normalized to equal one.
4. Tariffs Suppose Kenya is open to free trade in the world market for wheat. Because of Kenya's small size, the demand for and supply of wheat in Kenya do not affect the world price. The following graph shows the domestic wheat market in Kenya. The world price of wheat is Pw =$250 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). 490 Domestic Demand Domestic Supply 460 CS 430 400 370 PS 340 310 280 250 220 190 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of tons of wheat) If Kenya allows international trade in the market for wheat, it will import tons of wheat. Now suppose the Kenyan government decides to impose a tariff of $60 on each imported ton of wheat. After the tariff, the price Kenyan consumers pay for a ton of wheat is $ and Kenya will import tons…
Question 2 Suppose that the demand for rice in Japan is given by the function Q = 100 -p and the domestic supply is Q = p. Suppose that the inverse world supply function is p = 30. (a) What would be the change in domestic producer surplus if imported rice is banned? (b) What would be the change in consumer surplus if a $5 tariff is imposed on imported rice? (c) What would be the change in imports if a $5 tariff is imposed on imported rice? (d) What would be the smallest tariff to completely eliminate imported rice? (e) A $5 per unit tariff has the same effect on producer and consumer surplus as a quota of
25. Assuming labor is the only resource and England has 60 man-hours (mhrs) and Portugal 180 mhrs of labor resource available for production, which country has the comparative advantage in wine? a) Portugal b) England c) Both d) Neither e) Cannot tell
I only need help in the 3 last questions Q1. The following table shows the output of rice and machinery one labor hour can produce in Mexico and Thailand: Rice Machinery Thailand 6 2 Mexico 2 1 What are the marginal products of labor in rice and machinery production in Thailand? What about Mexico? Which country has an absolute advantage in rice and which country has an absolute advantage in machinery? What is the autarkic price ratio of machinery relative to rice in each country? Which country has a comparative advantage in rice and which country has a comparative advantage in machinery? Suppose Mexico has 1,000 labor hours available. Construct the production-possibility frontier (PPF) and identify the optimal autarky equilibrium (using an indifference curve) for Mexico. Suppose the international price is set at 1 machinery:2.5 rice and Mexico decides to completely specialize in producing the product in which it has a comparative advantage. How would…
(Figure: Market for Engines) According to the figure, if there is no international trade, the equilibrium price in this market is: Price 2,000 1,000 500 Domestic supply Domestic demand 1.000 Quantity of engines

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