### Domestic Timber Market AnalysisConsider a nation that is too small to have any influence on world prices. The domestic timber demand and supply schedules for this nation are presented below.#### Price and Quantity Data| Price/board foot of timber | Quantity Demanded (board feet) | Quantity Supplied (board feet) ||----------------------------|--------------------------------|-------------------------------|| $0.44 | 0 million | 100 million || $0.40 | 20 million | 80 million || $0.36 | 40 million | 60 million || $0.32 | 60 million | 40 million || $0.28 | 80 million | 20 million || $0.24 | 100 million | 0 million |#### Graphical Illustrations1. **Pre-trade Equilibrium (Domestic Autarky)** - Graphically illustrate the pre-trade equilibrium price and equilibrium quantity using the demand and supply data.2. **Free Trade Scenario** - Graphically illustrate the levels of domestic consumption, domestic production, and imports under free trade, given the world price for timber is $0.28/board foot.3. **Impact of Import Tariff** - Graphically illustrate the impact of a specific import tariff of $0.04/board foot on the levels of domestic consumption, domestic production, and imports.#### Tariff Revenue Calculation- Calculate the revenue generated from the import tariff imposed on timber.### Graphical ExplanationThe graph should consist of:- A demand curve sloping downward, representing the quantity demanded decreases as price increases.- A supply curve sloping upward, indicating the quantity supplied increases as price increases.- Key points on the curves where the price and quantity intersect, marking the pre-trade equilibrium.- An indication of the world price line at $0.28, showing where domestic production and consumption adjust in the free trade scenario.- An additional line or adjustment to reflect the import tariff, demonstrating changes in production, consumption, and quantity of imports.

Equilibrium price and quantity are those values of quantity and price when demand and supply curves…

, Consider a nation that is too small to have any influence on world prices. The domestic timber demand and supply schedules for this nation are presented below. Quantity Demanded (board feet) Price/board foot of timer $0.44 0 million $0.40 20 million $0.36 40 million $0.32 60 million $0.28 80 million $0.24 100 million Graphically illustrate the pre-trade (domestic autarky) equilibrium price and equilibrium quantity. ..., Graphically illustrate the levels of domestic consumption, domestic production, and imports under free trade, given the world price for timber is $0.28/board foot. .) Graphically illustrate the impact of a specific import tariff of $0.04/board foot on the levels of domestic consumption, domestic production, and imports. Quantity Supplied (board feet) 100 million 80 million 60 million 40 million 20 million 0 million

, Consider a nation that is too small to have any influence on world prices. The domestic timber demand and supply schedules for this nation are presented below. Quantity Demanded (board feet) Price/board foot of timer $0.44 0 million $0.40 20 million $0.36 40 million $0.32 60 million $0.28 80 million $0.24 100 million Graphically illustrate the pre-trade (domestic autarky) equilibrium price and equilibrium quantity. ..., Graphically illustrate the levels of domestic consumption, domestic production, and imports under free trade, given the world price for timber is $0.28/board foot. .) Graphically illustrate the impact of a specific import tariff of $0.04/board foot on the levels of domestic consumption, domestic production, and imports. Quantity Supplied (board feet) 100 million 80 million 60 million 40 million 20 million 0 million

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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