Suppose that the world price for a good is 120 and the domestic demand-and-supply curves are...

Suppose that the world price for a good is 120 and the domestic demand-and-supply curves are given by the following equations:

Demand: P = 200 – 8Q

Supply: P = 20 + 10Q

a. How much is domestic consumption?

b. How much is domestic production?

c. Calculate the values of consumer and producer surplus.

d. If a tariff of 30% is imposed, how much do consumption and domestic production change?

e. What is the change in consumer and producer surplus?

f. How much revenue does the government earn from the tariff?

g. What is the net national cost of the tariff?

Solutions

Expert Solution

Dear student/learner, According to our protocol I am obliged to solve only four parts of a question. you can post the remaining parts separately. it was my great pleasure to help you solving this problem. I wish you best luck for your learning endeavour.
Happy Learning

Rahul Sunny answered 2 months ago

Next > < Previous

Related Solutions

Suppose that the world price for a good is 50, and the domestic demand and supply...

Suppose that the world price for a good is 50, and the domestic demand and supply curves are given by the following equations: DX: PD=100-4QD SX: PS=10+6QS How much is consumed? How much is produced domestically? What are the values of producer and consumer surplus? If a 5% import tariff is imposed, by how much do consumption and domestic production change? What is the change in consumer and producer surplus? How much revenue does the government earn from the tariff?...

Suppose the world price for shoes is $32 per pair. Domestic demand and domestic supply are...

Suppose the world price for shoes is $32 per pair. Domestic demand and domestic supply are determined by the following equations: Domestic Demand: p = 120 ≠ 2q Domestic Supply: p = 20 + 3q where p and q represent price and quantity, respectively. 1. Under free trade, the domestic economy purchases _____________ pairs of shoes. A) 15 B) 22 C) 44 D) none of the above 2. Under free trade, domestic producers supply ___________ pairs of shoes. A) 2...

Suppose the world price for a good is lower than the domestic price without trade. Explain...

Suppose the world price for a good is lower than the domestic price without trade. Explain the two sources of deadweight loss arising from a tariff. IMPORTANT: I know that the two sources of deadweight loss arising from tariffs are inefficent production and lost transactions. However, I don't know why that is. Could you please explain to me why inefficent production and lost transactions are the two sources of deadweight loss arising from tariffs when the world price for a...

The domestic supply and demand curves for washing machines are as follows: Supply: P= 2040+3Q Demand:...

The domestic supply and demand curves for washing machines are as follows: Supply: P= 2040+3Q Demand: P=4080-7Q where P is the price in dollars and the Q is the quantity in millions. The U.S. is a small producer in the world washing machine market. Where the current price (which will not be affected by anything we do) is $ 2,300. Congress is considering a tariff of $400. A. Calculate the domestic market for washing machines' price and quantity equilibrium. B....

The domestic supply and demand curves for hula beans are as follows: Supply: P = 50...

The domestic supply and demand curves for hula beans are as follows: Supply: P = 50 + Q Demand: P = 200 - 2Q where P is the price in cents per pound and Q is the quantity in millions of pounds. The U.S. is a small producer in the world hula bean market, where the current price (which will not be affected by anything we do) is 60 cents per pound. Congress is considering a tariff of 40 cents...

The domestic supply and demand curves for designer handbags are as follows: Supply: P= 189+5Q

The domestic supply and demand curves for designer handbags are as follows: Supply: P= 189+5Q Demand: P=414-4Q where P is the price in dollars and the Q is the quantity in hundreds. The U.S. is a small producer in the world handbag market. Where the current price (which will not be affected by anything we do) is $ 295 during free trade. Congress is considering a tariff of $15. A. Calculate the domestic market for designer handbags price and quantity...

Supply-Demand analysis Let the inverse market demand and supply curves for an arbitrary good be given...

Supply-Demand analysis Let the inverse market demand and supply curves for an arbitrary good be given by ?(??) = ? − ??? and ?(?? ) = ? + ??? , respectively, where ?? (conversely, ?? ) denotes quantity demanded (conversely, quantity supplied) and all lower-case Greek letters denote positive parameters such that ? > ??? > 0 and ? > ? (a) Solve for the market equilibrium price (? ∗ ) and quantity (? ∗ ) and show this solution...

Draw supply and demand curves. Assume that these are the supply and demand curves for the...

Draw supply and demand curves. Assume that these are the supply and demand curves for the Microsoft Surface tablet. Draw what happens on this graph when the price of iPads decreases. Surface tablets and iPads are substitute goods. Clearly illustrate and label all equilibrium points, prices, and quantities.

The domestic demand for good X in a small country is Dd=40-5P. The domestic supply for...

The domestic demand for good X in a small country is Dd=40-5P. The domestic supply for good X in that country is sd=20+5P. Draw the domestic demand and supply curves for good X (Note: the price should appear on the vertical axis in the graph). If the country allows no trade for good X, what are the equilibrium price, quantity produced and quantity consumed? Imports of good X are available in the world market at Px=1. Draw the total supply...

Suppose we have linear supply and demand functions for a good. At the price of 100...

Suppose we have linear supply and demand functions for a good. At the price of 100 euros the requested quantity is 25 units of the good while the offered quantity is 50 units. When the price changes from 100 euros and comes to equilibrium the demand elasticity is -3 and the supply elasticity is 1. 1.Explain the signs of elasticity 2.Find the supply and demand functions 3.Find the price and quantity balance

Subjects