Questions 12-15 refer to the simple (free)trade model graph of country A on the rightthat shows what happens to welfare ofconsumers, producers, and total, whencountry A opens its border to trade. Thedomestic price and world price are Pp andPw, respectively. The equilibrium quantityunder autarky (no trade) is Qp. After trade,domestic producers supply Qa and (QwQa) is imported from the rest of the world.Domestic Supply (S)Price (in US $) ↑GPDHPwExport SupplyKDomestic Demand (D)12. What is the gain in consumers' surplus (CS)after free trade? [Select one]а. НQaQDQwQuantityb. I+Jс. Н+1+]d. H +I+J+ K13. What is the gain in total welfare (CS+PS) after free trade? [Select one]а. Нb. I+Jс. Н +1+]d. H +1+J+ K14. Fill in the blanks: "Due to free trade,gain welfare andlose welfare, respectively.a. consumers, producersb. producers, governmentc. consumers, governmentd. government, producers15. What is the minimum "area" of surplus that needs to be transferred from the gainers to the losers (asidentified in question 14) such that after free trade everyone is at least as well of as they were beforeyoutrade?а. Нb. I+Jс. Н+1+]

Economics as a subject deals with the allocation of scarce resources among humans with unlimited…

Questions 12-15 refer to the simple (free) trade model graph of country A on the right that shows what happens to welfare of consumers, producers, and total, when country A opens its border to trade. The domestic price and world price are Pp and Pw, respectively. The equilibrium quantity under autarky (no trade) is Qp. After trade, domestic producers supply Qa and (Qw - Qa) is imported from the rest of the world. Domestic Supply (S) Price (in US $) PD Pw Export Supply K Domestic Demand (D) 12. What is the gain in consumers' surplus (CS) after free trade? [Select one] а. Н Qd Qw Quantity b. I+J c. H+1+J d. H +I+J+ K 13. What is the gain in total welfare (CS+PS) after free trade? [Select one] а. Н b. I+J с. Н+1+] d. H+I+J+ K 14. Fill in the blanks: "Due to free trade, gain welfare and lose welfare, respectively. a. consumers, producers b. producers, government c. consumers, government d. government, producers 15. What is the minimum "area" of surplus that needs to be transferred from the gainers to the losers (as you identified in question 14) such that after free trade everyone is at least as well of as they were before trade? а. Н b. I+J с. Н+1+]

Questions 12-15 refer to the simple (free) trade model graph of country A on the right that shows what happens to welfare of consumers, producers, and total, when country A opens its border to trade. The domestic price and world price are Pp and Pw, respectively. The equilibrium quantity under autarky (no trade) is Qp. After trade, domestic producers supply Qa and (Qw - Qa) is imported from the rest of the world. Domestic Supply (S) Price (in US $) PD Pw Export Supply K Domestic Demand (D) 12. What is the gain in consumers' surplus (CS) after free trade? [Select one] а. Н Qd Qw Quantity b. I+J c. H+1+J d. H +I+J+ K 13. What is the gain in total welfare (CS+PS) after free trade? [Select one] а. Н b. I+J с. Н+1+] d. H+I+J+ K 14. Fill in the blanks: "Due to free trade, gain welfare and lose welfare, respectively. a. consumers, producers b. producers, government c. consumers, government d. government, producers 15. What is the minimum "area" of surplus that needs to be transferred from the gainers to the losers (as you identified in question 14) such that after free trade everyone is at least as well of as they were before trade? а. Н b. I+J с. Н+1+]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Kazakhstan is an apple producer, as well as an importer of apples. Suppose the following graph shows Kazakhstan's domestic market for apples, where SK is the supply curve and Dk is the demand curve. The free trade world price of apples (Pw) is $200 per ton. Suppose Kazakhstan's government restricts imports of apples to 200,000 tons. The world price of apples is not affected by the quota. Analyze the effects of the quota on Kazakhstan's welfare. On the following graph, use the purple line (diamond symbol) to draw the Kazakhstan's supply curve including the quota SK+Q. (Hint: Draw this as a straight line even though this curve should be equivalent to the domestic supply curve below the world price.) Then use the grey line (star symbol) to indicate the new price of apples with a quota of 200,000 apples. PRICE (Dollars per ton) 1000 900 800 700 600 500 400 300 200 100 0 ▬▬▬‒‒‒‒ 0 50 SK 100 150 200 250 300 350 QUANTITY (Thousands of tons) D₂ K 400 Pw W 450 500 Sk+Q Price with Quota A Change…
Kazakhstan is an apple producer, as well as an importer of apples. Suppose the following graph shows Kazakhstan's domestic market for apples, where SK is the supply curve and Dx is the demand curve. The free trade world price of apples (Pw) is $200 per ton. Suppose Kazakhstan's government restricts imports of apples to 200,000 tons. The world price of apples is not affected by the quota. Analyze the effects of the quota on Kazakhstan's welfare. On the following graph, use the purple line (diamond symbol) to draw the Kazakhstan's supply curve including the quota SK+Q. (Hint: Draw this as a straight line even though this curve should be equivalent to the domestic supply curve below the world price.) Then use the grey line (star symbol) to indicate the new price of apples with a quota of 200,000 apples. PRICE (Dollars per ton) 1000 900 800 700 600 500 400 300 200 100 0 0 50 SK Pw W 100 150 200 250 300 350 400 450 500 QUANTITY (Thousands of tons) SK+Q Price with Quota A Change in PS Quota…
The small nation of Capralia has an abundant stock of Pashmina goats, a breed that yields high-quality cashmere. Capralia's authorities are still debating whether to open their economy to international trade. The international price of cashmere is $70,000 per metric ton, and the Capralian cashmere sells for $50,000 per metric ton. Place the consumer surplus triangle (CS) and the producer surplus triangle (PS) to correctly depict consumer and producer surplus if Capralia chooses to open its borders to the international cashmere trade. 100 Price ($/metric ton) 90 80 70 60 50 40 30 20 Capralia's Domestic Cashmere Market 10 0 0 6 domestic supply domestic quilibrium domestic demand 30 42 36 18 24 12 Quantity (thousands of metric tons). 48 54 60 CS APS ENG
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Based on the information from the previous graph, absent international trade total surplus is $ The following graph shows the same domestic supply and demand curves for melons in Bangladesh. Now, suppose that the Bangladeshi government changes its stance on international trade, deciding to allow free trade in melons. The horizontal black line (Pw) represents the world price of melons at $500 per ton. Assume that Bangladesh's entry into the world market for melons has no effect on the world price and there are no transportation or transaction costs associated with international trade in melons. Also assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Use the green triangle (triangle symbol) to shade in the area representing consumer surplus, and then use the purple triangle (diamond-symbol) to shade in the area representing producer surplus. PRICE (Dollars per ton) 660 Domestic Demand Domestic Supply 620 580 540…
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Choose four countries. One country in North America, another country in Central America, another country in the Caribbean and another country in South America and indicate, using the gravity model, which factors should increase or reduce trade between those countries. After that, choose a country in Europe and indicate, using the Gravity Model, how the intensity of trade changes with five countries. You must take into account the concept of the gravity model and the factors that affect trade such as language, culture, trade agreements, among others. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Suppose Zambia is open to free trade in the world market for soybeans. Because of Zambia's small size, the demand for and supply of soybeans in Zambia do not affect the world price. The following graph shows the domestic soybeans market in Zambia. The world price of soybeans is Pw = $400 per ton. Throughout this problem, assume that changes in trade policies in other nations do not significantly affect the world market for soybeans and that there are no transportation or transaction costs associated with international trade in soybeans. Also assume that domestic supplies will satisfy domestic demand as much as possible before any exporting or importing takes place. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing domestic producer surplus (PS). PRICE (Dollars perton) 1200 Domestic Demand…
Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of meekers is $30. Suppose that the world price of meekers is $40. Assume that Meekertown is too small to influence the world price of meekers once it enters the international market. If Meekertown allows free trade, then it will meekers. Given current economic conditions in Meekertown, complete the following table by indicating whether each of the statements is true or false. Statement True False Meekertownian consumers are worse off under free trade than they were before. Meekertownian producers were better off without free trade than they are with it. True or False: When a country is too small to affect the world price, allowing free trade will have a non-negative effect on total surplus in that country, regardless of whether it imports or exports as a result of international trade. O True False
The small nation of Capralia has an abundant stock of Pashmina goats, a breed that yields high-quality cashmere. Capralia's authorities are still debating whether to open their economy to international trade. The international price of cashmere is $70,000 per metric ton, and the Capralian cashmere sells for $50,000 per metric ton. Place the consumer surplus triangle (CS) and the producer surplus triangle (PS) to correctly depict consumer and producer surplus if Capralia chooses to open its borders to the international cashmere trade. 100 Price (metric ton) 90 80 70 80 50 40 30 20 10 10 0 Capralia's Domestic Cashmere Market 6 domestic supply domestic equilibrium 12 18 24 30 36 42 Quantity (thousands of metric tons) 48 54 60 CS Capralia will import 36,000 metric tons of cashmere. Capralia will export 24.000 metric tons of cashmere. Capralia will not engage in international trade. Capralia will export 12,000 metric tons of cashmere. Capralia will import 24,000 metric tons of cashmere. PS…