P 25 20 15 10 5- 0 COUNTRY 1 FS1 IP 03 d1 Q INTERNATIONAL MARKET 25 20 15 10 LO 5 P 25 20 S1 15 10 S2 FIP D2 0 0 3 6 9 1215182124Q LC P 5 D1 0- 691215182124 24. What is the net welfare gain from trade to the economy of country 1? (hint: the formula for calculating the area of a triangle is 1/2 times the base times the height) O(a) 3 O (b) 6 O (c) 9 O (d) 13.5 O (e) 18 COUNTRY 2 s2 FIP d2 0 3691215182124Q

P 25 20 15 10 5- 0 COUNTRY 1 FS1 IP 03 d1 Q INTERNATIONAL MARKET 25 20 15 10 LO 5 P 25 20 S1 15 10 S2 FIP D2 0 0 3 6 9 1215182124Q LC P 5 D1 0- 691215182124 24. What is the net welfare gain from trade to the economy of country 1? (hint: the formula for calculating the area of a triangle is 1/2 times the base times the height) O(a) 3 O (b) 6 O (c) 9 O (d) 13.5 O (e) 18 COUNTRY 2 s2 FIP d2 0 3691215182124Q

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Chapter 10: In the small open economy of Gatorland, the domestic demand for widgets is given by P=100-3Q; the home supply of widget is given by P = Q. The world price is $40. Now let the government of Gatorland give a $15 per unit subsidy on each widget exported. What is the value of total subsidy payments to Gatorland's widget exporters? O $825 O $600 O $125 O $225
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Based on Figure 48, choose the correct statement. Assume that Nation 2 imposes a quota (30X) on imports of X (an agricultural commodity). Figure 48 Partial equilibrium effects of an import quota Py (S) 25 10 20 25 30 40 50 55 60 65 70 O 1) Given the increase in demand from Dx to D'x, the price of X increases to $2.5, and the quota is 20X. 2) Given the increase in demand from Dx to D'x, the price of X increases to $2.5, and the quota is 55X. 3) Given the increase in demand from Dx to D'x, the price of X increases to $2, and the quota is the same. O 4) Given the increase in demand from Dx to D'x, the price of X increases to $2.5, and the quota is the same.
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