Question 2[Soalan 2]The following graph shows the effect of free trade on the domestic quantitiesdemanded and supplied of good A in a small nation.[Graf berikut menunjukkan kesan perdagangan bebas terhadap kuantiti diminta dan ditawarkan bagibarang A dalam sebuah negara yang kecil.]P (RM) ,8000.Q (units)1,000Suppose that under free trade, the country imports 1,500 units of good A, and theworld price is RM450, calculate how many units of good A the country consumes.(Diandaikan bahawa dalam perdagangan bebas, negara tersebut mengimpot 1.500 unit barang A, danharga dunia adalah RM450, kirakan berapa unit barang A yang digunakan oleh negara tersebut.]SI

Given Information Initial Quantity demanded and supplied = 1000 at a Price of 800 for good A.…

The following graph shows the effect of free trade on the domestic quantiti demanded and supplied of good A in a small nation. [Graf berikut menunjukkan kesan perdagangan bebas terhadap kuantiti diminta dan ditawarkan ba barang A dalam sebuah negara yang kecil.] P (RM), S 800 D. 0. 1,000 Q (units) Suppose that under free trade, the country imports 1,500 units of good A, and the world price is RM450, calculate how many units of good A the country consumes. [Diandaikan bahawa dalam perdagangan bebas, negara tersebut mengimpot 1,500 unit barang A, dar aa R450 Firakan herang vmit barang 4 vang diaunakan olah negara 1arsabut 7

The following graph shows the effect of free trade on the domestic quantiti demanded and supplied of good A in a small nation. [Graf berikut menunjukkan kesan perdagangan bebas terhadap kuantiti diminta dan ditawarkan ba barang A dalam sebuah negara yang kecil.] P (RM), S 800 D. 0. 1,000 Q (units) Suppose that under free trade, the country imports 1,500 units of good A, and the world price is RM450, calculate how many units of good A the country consumes. [Diandaikan bahawa dalam perdagangan bebas, negara tersebut mengimpot 1,500 unit barang A, dar aa R450 Firakan herang vmit barang 4 vang diaunakan olah negara 1arsabut 7

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose Home’s demand and supply functions for wheat are D=110-2P and S=20+20P and Foreign’s demand and supply functions for wheat are D*=80-2P and S*=40+2P a. Derive Home’s import demand and Foreign’s supply schedule and prices of wheat in absence of trade. b. Now, Home and Foreign opens up to trade. Find the equilibrium under free trade. What is the world price of wheat and what is the volume of trade? c. Suppose Home imposes a specific tariff of 0.5 on wheat imports. Determine the effect of tariff on the price of wheat in each country, the quantity supplied and demanded in each country and volume of trade. d. Determine the effect of tariff on the welfare of Home consumers, Home government and Home import-competing producers.
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From an economic point of view, India and China are somewhat similar: Both are huge, low-wage countries, probably with similar patterns of comparative advantage, which until recently were relatively closed to international trade. China was the first to open up. Now that India is also opening up to world trade, how would you expect this to affect the welfare of China? Of the United States? (Hint: Think of adding a new economy identical to that of China to the world economy.) A. From China's perspective, the world relative supply curve will shift to the left. This shift will improve China's terms of trade. The U.S. purchases of Chinese exports will hurt the U.S. by decreasing the relative price of goods that the U.S. exports. B. From China's perspective, the world relative supply curve will shift to the right. This shift will worsen China's terms of trade. The U.S. purchase of Chinese exports will benefit the U.S. by increasing the relative price of goods that the U.S. exports. C. From…