35 30 Domesti demand 25 O 20 A 15 10 Domestic supply 10 20 30 40 50 60 Quantity (thousands per month) This represents the domestic market for widgets. Free trade is allowed and the current world price is $12. Consider that the government decides to impose a tariff of $2 on widgets. As a result, consumer surplus, in thousands, is equal to $60 O $120 $196 $280

35 30 Domesti demand 25 O 20 A 15 10 Domestic supply 10 20 30 40 50 60 Quantity (thousands per month) This represents the domestic market for widgets. Free trade is allowed and the current world price is $12. Consider that the government decides to impose a tariff of $2 on widgets. As a result, consumer surplus, in thousands, is equal to $60 O $120 $196 $280

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 8PA

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Lesson 12 Question 7
Korea’s demand for computers isQK = 2, 000 − PkIts supply isQK = −200 + PkChina’s demand for computers isQC = 1, 000 − Pc Its supply isQC = Pc1. 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.