3. Suppose we divide the world into 2 regions, A and B, and that: Region A's demand curve for microwaves is given by: DA= 1,800-20P. Its supply curve is: SA = 25P Region B's demand curve for microwaves is given by: DB = 1,375-40P. Its supply curve is: SB = 15P (a) Under no trade, what will be the equilibrium price and quantity is each region? (b) Under no trade, what will be the consumer surplus and producer surplus in each region? (c) When trade occurs, which region will export microwaves? Explain briefly.

3. Suppose we divide the world into 2 regions, A and B, and that: Region A's demand curve for microwaves is given by: DA= 1,800-20P. Its supply curve is: SA = 25P Region B's demand curve for microwaves is given by: DB = 1,375-40P. Its supply curve is: SB = 15P (a) Under no trade, what will be the equilibrium price and quantity is each region? (b) Under no trade, what will be the consumer surplus and producer surplus in each region? (c) When trade occurs, which region will export microwaves? Explain briefly.

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 8PA

See similar textbooks

Similar questions

9. How does the fact that many goods are nontraded affect the extent of possible gainsfrom trade?
2. Suppose cheap mountain bikes are made in both the US and the Philippines. The supply and demand for each market are given by: US Qd = 9110 – P Qs = 100P – 2000 Philippines Qа 3D 100— 0.5P Q 3 Р- 20 Find the autarky equilibrium price and quantity sold in each country. b. Now suppose the two countries engage in international trade with each other. Find the combined supply and demand equations. Now find the trade price and quantity (world total quantity and imports/exports). Comment on the trade price and the relative size of the two markets. d. а. с. In general, which country will gain relatively more by engaging in international trade. Explain briefly.
Kawmin is a small country that produces and consumesjelly beans. The world price of jelly beans is$1 per bag, and Kawmin’s domestic demand andsupply for jelly beans are governed by the followingequations:Demand: QD = 8 − PSupply: QS = P,where P is in dollars per bag and Q is in bags of jellybeans.a. Draw a well-labeled graph of the situation inKawminif the nation does not allow trade.Calculatethe following (recalling that the area ofa triangle is ½ × base × height): the equilibriumprice and quantity, consumer surplus, producersurplus, and total surplus.b. Kawmin then opens the market to trade. Drawanother graph to describe the new situation inthe jelly bean market. Calculate the equilibriumprice, quantities of consumption and production,imports, consumer surplus, producer surplus, andtotal surplus.c. After a while, the Czar of Kawmin respondsto the pleas of jelly bean producers by placinga $1 per bag tariff on jelly bean imports. On a graph, show the effects of…
Suppose that Estonia, which is a"small economy, and it can import plastic chairs at a price of 20 per unit The domestic supply curve of plastic chairs is the following: S=40+10P And the demand curve in Estonia for plastic chairs is: D=800-5P In addition, each unit of plastic chair production yields a marginal social benefit of 10. a) Calculate the total effect on welfare of a tariff of 15 per unit levied on imports. Only typed answer
Consider that the market for ethanol in Brazil is described by the following equations: Demand: P = 20-0.5Q Supply: P = 5 + Q If the government of Brazil allows free trade and the world price is $10, then a. Brazil will import 5 barrels of ethanol per day. b. Brazil will export 10 barrels of ethanol per day. c. Brazil will export 15 barrels of ethanol per day. Brazil will import 15 barrels of ethanol per day. d.
Korea’s demand for computers isQK = 2, 000 − PkIts supply isQK = −200 + PkChina’s demand for computers isQC = 1, 000 − Pc Its supply isQC = Pc1. Suppose that Korea imposes a specific tariff of $100 on computerimports. Calculate the price of computers in each country and thequantity of computers supplied and demanded in each country. Alsocalculate the volume of trade.
Use the graph below and the following information to answer the next question(s). The world price of soybeans is $5.00 per bushel, and the importing country is small enough not to affect the world price. Suppose the government puts a tariff of $1.00 per bushel on soybean imports. How much will the tariff reduce imports? 65 Os 10 million 60 70 80 million bushels O $ 60 million O$ 30 million 20 million bushels 40 million bushels 130 140 Q/millions bushels World price
Suppose a small country initially imports 100 units of a good. Then it imposes a tariff of $5 that reduces the quantity imported to 60 units. What is the net welfare change? Hint: Draw a diagram of the net welfare impacts of such a tariff and calculate the relevant area. -$100 O $500 O+$150 O -$200 Cton skaring Hide
The following graph shows intra-industry trade in the United States for two types of yogurts: Yoplait (a famous French brand) and Dannon (a famous American brand): 13 12 11. 10 A 9 7 1. -1 0 -11 O AKL. O AGH. Supply of Yoplait 3 O GHLK. O HPL. US Market for Yoplait (Y) Demand for Yoplait Yoplak 10 11 12 13 14 15 -1 12 Price 11 10 A 0 US Market for Dannon (D) Refer to the above graph. At the price of $6, intra-industry trade leads to a consumers surplus for Y equal to: Supply of Dannon Demand for Dannon Dannon 10 11 12 13
3. How does a tariff affect someone?
D Question 6 As part of a trade war, country A agrees to introduces a quota on cars imported from country B. Country A can then expect the price of cars imported from country B to decrease, and their quality to remain the same O the price and the quality of cars imported from country B to increase the price of cars imported from country B to increase, and their quality to decrease O the price and the quality of cars imported from country B to decrease
Explain with the help of diagrams:1. Assume that the Indian JuteIndustry is at present in a equilibrium state with the producers supplyingjute bags only to the domestic market atthe prevailing market prices. Apart from domestic suppliers, Indian juteindustry faces competition from Bangladesh. Explain with the help ofsupply-demand curves how the following events affect the equilibrium in thejute industry?a. Poor domestic demandb. Increasedcompetition from Bangladeshc. Cement industry,which is one of the largest users of jute bags,exempted from mandatory jute packagingd. Farmers, instead ofproducing jute, use their farm lands for some other purposes.