# International Trade and Tariffs: An Educational Overview## The T-shirt Market in Demorest, GAThis module examines the T-shirt market in Demorest, GA, using the following supply and demand functions to determine equilibrium conditions:### Equilibrium Price and Quantity- **Equilibrium Price (P):** 15.4- **Quantity (Q):** 480#### Demand and Supply Functions- **Demand:** $ P = 25 - 0.02Q $- **Supply:** $ P = 1 + 0.03Q $*Note: Ensure to label and identify relevant points on the graph as demonstrated in class.*### International Trade ScenarioSuppose the T-shirt market is open to international trade, with a world price of $7.#### Analysis Questions1. **Number of Shirts Consumers Want to Buy at World Price**2. **Number of Shirts Domestic Firms Will Produce at World Price**3. **Number of Shirts to be Imported**4. **Consumer Surplus With Trade**5. **Producer Surplus With Trade**### Graph AnalysisThe graph illustrates the supply and demand curves for T-shirts in Demorest. The x-axis represents the quantity (Q), and the y-axis represents the price (P). The intersection of the supply and demand curves denotes the equilibrium point. A horizontal line at the world price of $7 intersects these curves, indicating new quantities related to international trade.The task involves:- Determining consumer behavior at the world price.- Calculating domestic production levels under international trade conditions.- Identifying import levels and surplus changes.These insights are foundational for understanding market dynamics when a local market integrates into the global economy.

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Rebeco Fox Microeconomics International Trade and Tariffs This is the market for "T-shirts" in Demorest, GA. Use the following supply and demand function to find the following (same S and D formula from price controls): 1. Equilibrium price and quantity Demand: P = 25-0.02Q P = 15.4 Q = 480 Supply: P = 1 + 0.03Q Hint: label and the relevant points on the graph (like we did in class). (We did this already.) Suppose now the "T-shirt" market is open to international trade. The world price for "T-shirts" is $7. Now that trade is allowed, find the: 2. Number of shirts consumers want to buy at the world price. 3. Number of shirts domestic firms will produce at the world price. 4. How many shirts will be imported?

Rebeco Fox Microeconomics International Trade and Tariffs This is the market for "T-shirts" in Demorest, GA. Use the following supply and demand function to find the following (same S and D formula from price controls): 1. Equilibrium price and quantity Demand: P = 25-0.02Q P = 15.4 Q = 480 Supply: P = 1 + 0.03Q Hint: label and the relevant points on the graph (like we did in class). (We did this already.) Suppose now the "T-shirt" market is open to international trade. The world price for "T-shirts" is $7. Now that trade is allowed, find the: 2. Number of shirts consumers want to buy at the world price. 3. Number of shirts domestic firms will produce at the world price. 4. How many shirts will be imported?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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