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): 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) 4 4a 4b Calculate each country's price under autarky. Derive the export supply and import demand for the good and illustrate them together in

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): 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) 4 4a 4b Calculate each country's price under autarky. Derive the export supply and import demand for the good and illustrate them together in

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The market for pencils has a domestic demand equation P=20−0.5Q�=20−0.5�, and a domestic supply equation P=5+Q�=5+�, where quantity is measured in thousands. The world supply equation for pencils is PW=10��=10. If trade is allowed, what is the resulting equilibrium price and quantity?
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