Answered: 35. Suppose the government opens the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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35-37. The market for widgets has the following supply and demand curves: Supply: P = 10 + (1/3)Q Demand: P = 100 – (1/2)Q Initially, the market is in equilibrium at P = $46, Q = 108. Questions 35 through 37 concern this market. 35. Suppose the government opens the border to free trade in widgets and foreign suppliers have a perfectly elastic supply at a price of $40 per unit. As a result the dollar value of widget imports is: A) $0 B) $40 C) $3600 D) $4800 E) $1380 F) $1200 G) $5520 H) $4140 I) $2400 J) none of the above 36. As a result of trade (rounded to the nearest dollar) the gain to society has changed by: A) -$684 B) +$684 C) -$594 D) +$594 E) -$90 F) +$90 G) -$1278 H) +$1278 I) $0 J) None of the above 37. Suppose a new study comes out that identifies widgets as a source of a health hazard, exposure to them causes cancer. The study estimates that the total global external cost of widget production and consumption is given by the following expression: Now determine (rounded to the nearest dollar) the total gain to society (not the change in gain to society) after free trade: A) $1350 B) $3600 C) $2400 D) $2500 E) $2550 F) $6000 G) $7350 H) $4950 I) $4860 J) None of the above 2 6 1 QTEC  Page 13 of 14 38-39. In a small and isolated community, there are 25 consumers, each of whom has the following

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