Consider a closed economy. Suppose the market for com in ABC corp is competitive. The domestic supply and demand fucntion of corn is Qs = 10P-20 and Qd = 180-10P, respectively. Both of them measued in billions of bushels per year. 1. Suppose the govt. uses the price support progam to increase market price by $2 What is the equilibrium price and qty? What is the CS, PS, DWL, and Govt expenditure? Calcute the value and show GRAPHICALLY. 2. Now ignore part1 and consider a small open economy instead. The domenstic supply and demand curves remain the same. Suppose the wrold price is Pw = $6. Suppose the govt impose a tariff of $2 per bushel. What is the equillibrium price and qty? What is the CS, PS, DWL, and Govt expenditure? Calcute the value and show GRAPHICALLY.

Consider a closed economy. Suppose the market for com in ABC corp is competitive. The domestic supply and demand fucntion of corn is Qs = 10P-20 and Qd = 180-10P, respectively. Both of them measued in billions of bushels per year. 1. Suppose the govt. uses the price support progam to increase market price by $2 What is the equilibrium price and qty? What is the CS, PS, DWL, and Govt expenditure? Calcute the value and show GRAPHICALLY. 2. Now ignore part1 and consider a small open economy instead. The domenstic supply and demand curves remain the same. Suppose the wrold price is Pw = $6. Suppose the govt impose a tariff of $2 per bushel. What is the equillibrium price and qty? What is the CS, PS, DWL, and Govt expenditure? Calcute the value and show GRAPHICALLY.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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