Assume that demand and supply of a good in country 1 and country 2 are given by thefollowing expressions(prices are measured in euros and quantities in numbers per day):Q1 = 120P(demand in country 1)Q1 = P-20 (the supply in country 1)Q2=60-2P(demand in country 2)Q2=P-15 (the supply in country 2)4Calculate each country's price under autarky.Derive the export supply and import demand for the good and illustrate themtogether ina figure. Enter what you have on your shoulders; name and explain all graphs.. Calculate the world market price and traded quantity in case of free trade.4c4a4b

In the first step we need to find out the autarky price for each country autarky means when the…

4 Assume that demand and supply of a good in country 1 and country 2 are given by the following expressions (prices are measured in euros and quantities in numbers per day): Q1120P(demand in country 1) Q1 P-20 (the supply in country 1) Q2=60-2P (demand in country 2) Q2-P-15 (the supply in country 2) Calculate each country's price under autarky. Derive the export supply and import demand for the good and illustrate them together in a figure. Enter what you have on your shoulders; name and explain all graphs. 4c. Calculate the world market price and traded quantity in case of free trade. 4a 4b

4 Assume that demand and supply of a good in country 1 and country 2 are given by the following expressions (prices are measured in euros and quantities in numbers per day): Q1120P(demand in country 1) Q1 P-20 (the supply in country 1) Q2=60-2P (demand in country 2) Q2-P-15 (the supply in country 2) Calculate each country's price under autarky. Derive the export supply and import demand for the good and illustrate them together in a figure. Enter what you have on your shoulders; name and explain all graphs. 4c. Calculate the world market price and traded quantity in case of free trade. 4a 4b

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that the United States increases its tariff on steel imports. Steel prices to U.S. consumers would be expected to: (A) Increase, and the foreign demand for U.S. exports would increase (B) Decrease, and the foreign demand for U.S. exports would increase (C) Increase, and the foreign demand for U.S. exports would decrease (D) Decrease, and the foreign demand for U.S. exports would decrease.
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Consider the case of the following large country (all prices are measured in euros, and quantities are measured in single units): – Domestic demand curve: P = 3600 –3Q – Domestic supply curve: P = 2Q – World free trade price of imports = 140 euros per unit – When the tariff is introduced, domestic prices rise by exactly one third of the amount of the tariff. Calculate the following. Also show your workouts, draw a diagram depicting the importing country market under free trade and with a tariff. With a 30 euro specific tariff: The change in consumers' surplus going from free trade to the tariff, in euros: __________________________________________________________________________________ The change in producers' surplus going from free trade to the tariff, in euros: __________________________________________________________________________________ The amount of tariff revenue, in euros: __________________________________________________________________________________ The change…
00 7 F. PRICE (Dollars per ton) 4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for soybeans in Honduras. The world price (Pw) of soybeans is $530 per ton and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of soybeans and that there are no transportation or transaction costs associated with international trade in soybeans. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 2. Domestic Demand Domestic Supply 770 740 710 680 650 620 06 P, 530 MacBook Pro Search or type URL 4. 51 9.
Before the North American Free Trade Agreement (NAFTA) gradually eliminated import tariffs on goods, the autarky price of tomatoes in Mexico was below the world price and in the United States was above the world price. Similarly, the autarky price of poultry in Mexico was above the world price and in the United States was below the world price. Draw diagrams with domestic supply and demand curves for each country and each of the two goods. As a result of NAFTA, the United States now imports tomatoes from Mexico and the United States now exports poultry to Mexico. How would you expect the following groups to be affected? a. Mexican and U.S. consumers of tomatoes. Illustrate the effect on consumer surplus in your diagram. b. Mexican and U.S. producers of tomatoes. Illustrate the effect on producer surplus in your diagram. c. Mexican and U.S. tomato workers. d. Mexican and U.S. consumers of poultry. Illustrate the effect on consumer surplus in your diagram. e. Mexican and U.S.…
6. Imports and Exports When China's clothing industry expands, the increase in world supply lowers the world price of clothing. Consider the effects this has on both an importer and an exporter of clothing. Suppose the following graph represents the market for clothing in Pakistan prior to the expansion of China's clothing industry. Pakistan is an of clothing because the world price is the domestic equilibrium price. Note: You will have to use green points (triangle symbol) and purple points (diamond symbol) to shade the consumer and producer surplus areas on the following graphs. There are two green points and two purple points per graph. Use either one point of both to most accurately indicate the areas. For example, if indicating the consumer surplus requires only one green point, leave the second one on the palette. Use the green point (triangle symbol) to shade consumer surplus in Pakistan before China's clothing industry expands. Then use the purple point (diamond symbol) to…
10. Problems and Applications Q10 Consider a small country that exports steel. Suppose the following graph depicts the domestic demand and supply for steel in this country. One of the two price lines represents the world price of steel. Use the following graph to help you answer the questions below. You will not be graded on any changes made to this graph. Price of Steel (Dollars perton) 100 90 2 2 2 2 2 2 - 60 40 30 20 10 Demand 0 100 200 300 400 500 600 700 Quantity of Steel (Tons) Supply 800 900 1000 Triangle Polygon
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Domestic Demand Function: p= 80-4Q Domestic Supply Function: p= 20+2.5Q There is an international trade price equal to $30 (pw=30) What will the new Domestic Demand of books be?. What will be the new Domestic production for books be? What quantity of books will be mportd or exported?
Consider a demand curve where Q = 20-3P and two supply curves where Q = P + 2 (closed economy) and P = 2 (open economy). a- Draw these three curves on the same captioned graph (add your graph to the appendix) b- What are the price and the equilibrium quantity in a closed economy. c- Evaluate the gains for consumers in an open economy as well as the gains and losses for local and foreign producers. (index: price, quantity consumed, quantity produced locally, imports. Make a comparison between closed economy and open economy.) Calculate the social surplus in an open economy. d- If the government establishes an import quota of 8 units, what will be the changes compared to the previous situation (open economy without protection); calculate the social surplus in this case. e- How much should the price per unit be fixed so that the results are the same as those obtained in question d. f- What should be the price so that the market is distributed one third, two thirds between local…