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. Give any decimal answers to 1 decimal place. Put your answers in the spaces provided. Also show your workouts so as I know how you arrived to your answers. Draw a diagram depicting the importing country market under free trade and with a tariff. 3 Under free trade equilibrium: The quantity consumed domestically: ___________________________________________________ The quantity produced domestically: ___________________________________________________ The quantity imported:
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
– When the tariff is introduced, domestic prices rise by exactly one third of the amount
of the tariff.
Calculate the following. Give any decimal answers to 1 decimal place. Put your answers in
the spaces provided. Also show your workouts so as I know how you arrived to your answers.
Draw a diagram depicting the importing country market under free trade and with a tariff.
3
Under free trade equilibrium:
The quantity consumed domestically: ___________________________________________________
The quantity produced domestically: ___________________________________________________
The quantity imported: _
This homework is really confusing to me, especially when im tring to draw the diagrams
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