The figure shows the domestic supply and demand of a product in the United States. Suppose the world price of this product is $14. After the United States engages in free trade in this product, O A. the consumers will lose, the producers will win, but the overall economy will be worse off O B. the consumers will lose, the producers will win, but the overall economy will be better off O C. the consumers will win, the producers will win, and the overall economy will be better off O D. the consumers will win, the producers will lose, but the overall economy will be better off Price 21- 20 19 18 17 16 15 14 13 12 11- 10- 9 8 7 6 5 4 3 2 0 10 20 Supply Demand 30 40 50 60 70 80 90 100 110 120 130 Quantity (millions)

The figure shows the domestic supply and demand of a product in the United States. Suppose the world price of this product is $14. After the United States engages in free trade in this product, O A. the consumers will lose, the producers will win, but the overall economy will be worse off O B. the consumers will lose, the producers will win, but the overall economy will be better off O C. the consumers will win, the producers will win, and the overall economy will be better off O D. the consumers will win, the producers will lose, but the overall economy will be better off Price 21- 20 19 18 17 16 15 14 13 12 11- 10- 9 8 7 6 5 4 3 2 0 10 20 Supply Demand 30 40 50 60 70 80 90 100 110 120 130 Quantity (millions)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The table below shows the monetary value of the production of gems and steel respectively in the calendar year of 2019 for the nations of Turkey and Zimbabwe. Use It to answer questions regarding a possible trade scenarlo between the two nations. Year- 2019 Gems in billions of USD Steel in billions of USD 0.2 Zimbabwe 10 Turkey Which of the nations has a comparative advantage in the production of steel? O a Zimbabwe O b Nelther Turkey
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If the U.S. did not trade what price would the good cost? If the world price was $200 what quantity would the U.S. produce? What quantity would be imported. What is consumer surplus at the world price? Producer surplus at the world price? Who benefits from the free trade and who gets hurt If the U.S. government puts a tariff on the good so now the price is $300 who benefits, who is hurt? What quantity will U.S. producers now produce? What happens to consumer surplus from $200 to $300? What does producer surplus do with the price going from $200 to $300? What does the government gain with the tariff? Who benefits from free trade overall? Who benefits from trade restrictions? Why is a tariff the most used trade restriction?
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