3 Suppose we divide the world into 2 regions, Aand B, and that:Region A's demand curve for microwaves isgiven by:DA = 1,800 - 20P. Its supply curve is: SA = 25PRegion B's demand curve for microwaves isgiven by:DB = 1,375 - 40P. Its supply curve is: SB = 15P(a) Under no trade, what will be theequilibrium price and quantity is each region?(b) Under no trade, what will be the consumersurplus and producer surplus in each region?(c) When trade occurs, which region willexport microwaves? Explain briefly.(d) Under free trade and zero transportationcost, what would be the world price ofmicrowaves?%3D(e) Under free trade, how many microwaveswill be exported/imported?Under free trade, what will be the consumersurplus and producer surplus in each region?

a) For Country A:DA=1800-2P SA=25POr, we can write,QD=1800-2PQS=25PNow,…

Answered: Suppose we divide the world into 2…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter2: Economics: Eight Powerful Ideas

Section: Chapter Questions

Problem 15P

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3. Suppose we divide the world into 2 regions, A and B, and that: Region A's demand curve for microwaves is given by: DA = 1,800-20P. Its supply curve is: SA = 25P Region B's demand curve for microwaves is given by: DB = 1,375-40P. Its supply curve is: SB = 15P (a) Under no trade, what will be the equilibrium price and quantity is each region? (b) Under no trade, what will be the consumer surplus and producer surplus in each region? (c) When trade occurs, which region will export microwaves? Explain briefly. (d) Under free trade and zero transportation cost, what would be the world price of wine? (e) Under free trade, how many microwaves will be exported/imported? (f) Under free trade, what will be the consumer surplus and producer surplus in each region?
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