The world price of aluminum is Pw = $20. The US domestic supply of aluminum and the domestic demand for aluminum are: Domestic supply: P = 10 + ½Qs Domestic demand: P = 50 – ½QD a. If there is free trade in aluminum: The quantity demanded by US buyers is The quantity supplied by US producers is, The quantity supplied by foreign producers to US buyers is b. Suppose that the US imposes a tariff on aluminum imports of TARIFF = $5 per unit: The quantity demanded by US buyers is The quantity supplied by US producers is The quantity supplied by foreign producers to US buyers is c. GRAPH (next page) the domestic demand curve (Dus), the domestic supply curve (Sus), and the (horizontal) supply curve of aluminum from the rest of the world to the US (SROW). (Label areas A, B, C,... in the graph and show calculations below.)

The world price of aluminum is Pw = $20. The US domestic supply of aluminum and the domestic demand for aluminum are: Domestic supply: P = 10 + ½Qs Domestic demand: P = 50 – ½QD a. If there is free trade in aluminum: The quantity demanded by US buyers is The quantity supplied by US producers is, The quantity supplied by foreign producers to US buyers is b. Suppose that the US imposes a tariff on aluminum imports of TARIFF = $5 per unit: The quantity demanded by US buyers is The quantity supplied by US producers is The quantity supplied by foreign producers to US buyers is c. GRAPH (next page) the domestic demand curve (Dus), the domestic supply curve (Sus), and the (horizontal) supply curve of aluminum from the rest of the world to the US (SROW). (Label areas A, B, C,... in the graph and show calculations below.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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