Price per unit Quantity demanded Quantity supply (billions of units per year) (billi ons of units per year) 10 25 12 20 20 14 15 40 16 10 60 18 80 20 100

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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A semiconductor is a key component in your laptop, cell phone, and iPod. The table provides information about the market for semiconductors in the United States. Producers of semiconductors can get $18 a unit on the world market.

a. With no international trade, what would be the price of a semiconductor and how many semiconductors a year would be bought and sold in the United States?  

b. Does the United States have a comparative advantage in producing semiconductors.

c. Draw a graph  to illustrate the U.S. supply and demand market for semiconductors. What is the price with free international trade? What is the quantity of semiconductors produced in U.S. and total quantity bought by U.S. people and the quantity exported from other countries?  

d. Due to loss of competitiveness brought on by appreciation of the exchange rate and the high production costs, U.S. government reduce the export (or limit the supply of domestic producers) by imposing an export quota of 20 billion units per year. What happens to U.S. price of semiconductors, the quantity of semiconductors bought by U.S. people, and the quantity of semiconductors exported? 

Price per unit
Quantity demanded
Quantity supply
(billions of units per year)
(billi ons of units per year)
10
25
12
20
20
14
15
40
16
10
60
18
80
20
100
Transcribed Image Text:Price per unit Quantity demanded Quantity supply (billions of units per year) (billi ons of units per year) 10 25 12 20 20 14 15 40 16 10 60 18 80 20 100
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