Assume that there are two countries in the world: Home and Foreign. Home’s demand curve for wheat is D = 125 - 25P and supply curve is S = 20 + 40P. Suppose that Foreign is a much larger country, with domestic demand D* = 1100 - 300P and supply S* = 650 + 200P.

a) What would the price of wheat be in case of no trade in Home? b) What would the price of wheat be in case of no trade in Foreign?

Now assume that Home and Foreign can trade with each other (no barriers, i.e. free trade).

c) Derive the Home import demand curve equation (no graph required) d) Derive the Foreign export supply curve equation (no graph required) e) Calculate the free trade equilibrium world price of wheat
f) Calculate the free trade equilibrium world trade volume (quantity)

Now assume that Home imposes a specific tariff of 0.3 on wheat imports.

g) Calculate the price of wheat in Foreign in case of the tariff
h) Calculate the price of wheat in Home in case of the tariff
i) Calculate the volume of trade (quantity) in case of the tariff
j) Explain why the volume of trade decreases with imposing the tariff
k) Explain (no graph or calculations required) who gains and who loses from imposing the tariff in case of each of the following groups: Home import-competing producers, Home consumers, Home government.

Answer to E-K)

Suggest one effective solution of each question and give some explanation or examples.

D=250-0.5Q

1.What can you say about the demand as the price increases from $150 to $200? *   

a.Elastic.

b.Inelastic.

c.Unit elastic.

d.Perfectly inelastic

2.Which of the following is a determinant of price elasticity of demand? *

a.Availability of close substitutes.

b.Income.

c.Nature of commodity.

d.All of the above.

3.What is the quantity demanded at price $150? *

a.175.

b.200.

c.100.

d.Cannot be determined.

4.What is the price at quantity demanded 100? *

a.$300.

b.$100.

c.$200.

d.Cannot be determined.

5.What is the price elasticity of demand as price increases from $150 to $200? *

a.-1.

b.-2.

c.-2.3.

d.-1.5.

1. (a) “….Immigrants aren’t the principal reason wages haven’t gone up; those decisions are made in the boardrooms that all too often put quarterly earnings over long-term returns…The point is, I believe that in this new economy, workers and start-ups and small businesses need more of a voice, not less. The rules should work for them. And I’m not alone in this. This year I plan to lift up the many businesses who’ve figured out that doing right by their workers or their customers or their communities ends up being good for their shareholders. And I want to spread those best practices across America. That’s part of a brighter future.” remarked former US President Barack Obama during the 2016 State of the Union Address.   

The President effectively joins a long raging debate on the effects of immigrants on the wages of natives. Using an appropriate economic model, analyse the validity of his argument. Identify any caveats in your analysis (use an appropriate graphical illustration).

You attend an academic lecture on campus and the presenter is trying to analyze support for President Trump’s impeachment. They are using the results from a survey that asks respondents “on a scale from 1 – 10, how much do you support President Trump’s impeachment? 1 means that you would strongly disapprove of impeachment, and 10 means that you strongly support impeachment.” Because you are a budding economist, you care about revealed preferences and are inherently skeptical of the setup of this study. In order to capture revealed preference, suggest another statistic this researcher could use to analyze support for President Trump’s impeachment, why?

how can a cost benefit analysis be used to inform decision making in the private sector?

Explain thoroughly when an expansionary fiscal policy is appropriate and when a contractionary fiscal policy is appropriate.   

Explain the three fiscal policies that can be used in expansionary fiscal policy.  Each policy must come with an example.  

Explain the three fiscal policies that can be used in contractionary fiscal policy.  Each policy must come with an example.  

Please leave any websites you use thanks! :)

By common definition, a recession occurs when________?

Steel is considered to be_____?

15. Comment critically (take a position whether the statement is correct, incorrect or partially correct and support your position based on facts acquired in the course—not based on personal opinion): ‘Even though population increase takes place and economic prosperity increases, innovation in agriculture and reliance on market mechanism will assure availability of food for all.”

There are N symmetric firms in the industry, facing market demand
Q (p) = 250-p

Firms have a constant marginal cost of production of c = 10, and they compete in prices.
a) What are the Bertrand equilibrium price, output levels, and profits?
b) Suppose that the firms want to sustain the monopoly price using grim trigger strategies. Let each firm
produce a share of 1/N of the total demand under collusion. Calculate the critical discount factor as a function D (Delta) of N. Does collusion become easier or harder to sustain as N increases?
c) Suppose that the actual discount factor is = 0.7. How many firms can enter this industry without jeopardizing the cartel?

Explain deeply how does increase in prices affect on price-setting relation & wage setting relation? What happens to real wage and unemployment? Why?

What is the difference between labor force & out of labor force? To which category retired population is included?

You are looking for different flavors to add to your tea, to you, cardamom (x₁) is a “bad” and turmeric (x₂) is a “good.” Draw your indifference curves for both goods on the graph below (label your graph), briefly describe why the curves are shaped this way.

Amy has the utility function U=min(2x+y, x+2y) for goods x and y.

1) Draw the indifference curves where U=6 and U=12.

2) Draw Amy's typical demand curve for good x.

Based on compensating differentials who would you expect to earn more a lumberjack or a store clerk?

For the most part, product differentiation is accomplished through ___________.

How do unions control the supply of Labor?

Why do special interests so have so much power in our political system?

Why are voters rationally ignorant?

I will be thankful if you can share your opinion and ideas for these questions! I will like it for sure!

Thank you and stay safe!