Using the previous scenario: The US market of sunflower described by the following domestic supply and demand equations: QDUS = 8000 – 4 P QSUS = -2000 + 6 P where QDUS and QSUS represent the quantities demanded and supplied (in tons) and P is the price per ton of sunflower oil (in $). Now add this information: In 2008, China entered into the World Trade Organization and became the largest importer of US sunflower oil. Assume the Chinese import demand for sunflower oil from the US in 2008 was QDCHINA = 20000 – 10 P Given this information, what was the new equilibrium price of sunflower oil in 2008? a. $1600 b. $1400 c. $1500 d. $10,500
Using the previous scenario: The US market of sunflower described by the following domestic
largest importer of US sunflower oil. Assume the Chinese import demand for sunflower oil from the US in 2008 was
QDCHINA = 20000 – 10 P
Given this information, what was the new
| a. |
$1600 |
|
| b. |
$1400 |
|
| c. |
$1500 |
|
| d. |
$10,500 |
Given your answer in the previous question regarding equilibrium price with trade, how much sunflower oil does China purchase from US producers?
| a. |
5000 tons |
|
| b. |
4000 tons |
|
| c. |
2000 tons |
|
| d. |
3000 tons |
Calculate the increase in U.S. producers total revenue as a result of trade.
| a. |
$10,000,000 |
|
| b. |
$2,500,000 |
|
| c. |
$6,500,000 |
|
| d. |
$6,000,000 |
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