EBK MICROECONOMICS
9th Edition
ISBN: 8220103630955
Author: Rubinfeld
Publisher: PEARSON
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Question
Chapter 9, Problem 6E
(a)
To determine
Identify the demand function and the supply function.
(b)
To determine
Identify the imports if there are no restrictions on trade.
(c)
To determine
Identify the price and level of imports after imposing tariff.
(d)
To determine
Identify the domestic price, cost of consumers, and gain of producers after imposing import quota.
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3. Consider the case of everyone being wealthier in the future, such as from a positive
productivity shock (computers, internet, robotics, AI).
A. Begin from the baseline preferences and endowments.
Give both people an endowment of 1000 pounds for the first period and 1100 pounds for the
second. AI increases the supply of second period goods by 10%.
Note that there is now a total of 2000 pounds in the first period and 2200 pounds in the
second.
Determine the equilibrium interest rate.
r =
%
B. Begin from the baseline preferences and endowments.
Give both people an endowment of 1100 pounds for the first and 1100 pounds for the second
periods. AI increases the supply in all periods by 10%.
Note that there are now 2200 pounds in the first period and 2200 pounds in the second.
Determine the equilibrium interest rate.
r =
%
C. Explain how productivity and the real rate are connected.
Write at least five sentences.
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