Suppose we have the following table that summarises the domestic demand and supply schedule for Canadian...

Suppose we have the following table that summarises the domestic demand and supply schedule for Canadian crude oil

Price	Quantity Demanded	Quantity Supplied
98	16	10
99	15	11
100	14	12
101	13	13
102	12	14
103	11	15
104	10	16
105	9	17
106	8	18

If Canada does not trade with the rest of the world, what is the equilibrium price ___ ? (Answer is 101, how did they get that?)

What is the equilibrium quantity _____? (Answer is 13, how did they get that?)

Suppose the world price is 102, and Canada opens up free trade, what is the new equilibrium price in Canada _____? (Answer is 102, how did they get that?)

Canada will have ____ units in its domestic market? (Answer is 2, how did they get that?)

Suppose the world price is 102 and Canada imposes a tariff of 4 then Canada exports ____ units? (Answer is 10, how did they get that?)

Solutions

Expert Solution

If Canada does not trade, its equilibrium would be where QD=QS

Equilibrium price = 101 and Quantity = 13

When the world price is 102, since the price is greater than the domestic price, Canada will export goods

New equilibrium price = 102 as world price would be the domestic price after it opens for trade

Canada will have 2 units in the domestic market as the quantity demanded at the world price = 12 whereas QS = 14 so exports = 14-12 = 2

With the tariff, the price will increase to 102+4 = 106 where QD = 8 and QS = 18 so the Exports = 18-8 = 10

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Suppose that the domestic supply and demand for snowboards in Canada are given by the following...

Suppose that the domestic supply and demand for snowboards in Canada are given by the following equations: QS = -110 + 3P and QD = 390 – 2P. What is the equilibrium price and quantity in Canada? Accurately graph the demand and supply along with the equilibrium. What is the consumer surplus and producer surplus at equilibrium? If Canada can trade snowboards freely with the rest of the world at the price of $80, how many snowboards will be produced...

2 Suppose the following are the supply and demand schedules for rice in India. Demand Schedule...

2 Suppose the following are the supply and demand schedules for rice in India. Demand Schedule for Rice Price ($ per Pound) Quantity Demanded (pounds/week) 0.50 700 1.00 500 1.50 300 2.00 100 2.50 0 Supply Schedule for Rice Price ($ per pound) Quantity Supplied (pounds/week) 0.50 100 1.00 200 1.50 300 2.00 400 2.50 500 Graph this market on a clearly labeled supply-demand diagram. Is there an equilibrium? If yes, what are the price and quantity? If no, please...

Suppose the domestic supply and demand for snowboards in Canada are given by the following equations:...

Suppose the domestic supply and demand for snowboards in Canada are given by the following equations: QS = –110 + 3P QD = 390 – 2P [a] In the absence of international trade in snowboards, what will the domestic price be? [b] In the absence of international trade in snowboards, how many snowboards will be sold in Canada? c) If Canada could trade snowboards freely with the rest of the world at the price of $80, how many snowboards will...

The following table is a demand and supply schedule of rental gym lockers across the state....

The following table is a demand and supply schedule of rental gym lockers across the state. Price per rental, $ Quantity demanded Quantity supplied 2 1,150 200 2.5 1,100 500 3 1,050 800 3.5 1,000 1,000 4 900 1,100 4.5 800 1,200 At what price(s) there is a rental lockers’ market equilibrium? List all. Answer: At what price(s) there is a shortage of rental lockers? List all. Answer: At what price(s) there is a surplus of...

The Following table shows the demand and supply schedule for pineapple fruits Quantity Demand kg price($)...

The Following table shows the demand and supply schedule for pineapple fruits Quantity Demand kg price($) Quantity Supplied in kg 26 5 4 23 10 9 18 15 14 14 20 18 9 25 23 4 30 26 a. Plot the supply and demand curves. b. Identify the equilibrium price and quantity c. What will happen if government passed a law that no seller should sell bellow a price of $25. d. Explain the market situation at a price of 5. e. If quantity...

Suppose that we have the following supply and demand functions for gumboots in a small, open...

Suppose that we have the following supply and demand functions for gumboots in a small, open economy called Finland: QS=-30+2p QD =60–p where QS and QD are measured in 1000’s of pairs of gumboots. The world price of gumboots equals $25. Which of the following is TRUE? 1) The price of gumboots in Finland is $30 per pair. Finland will neither export nor import. 2) The price of gumboots in Finland is $25 per pair. Finland will import 15,000 pairs...

1. Suppose that the domestic supply and demand for snowboards in Canada are given by the...

1. Suppose that the domestic supply and demand for snowboards in Canada are given by the following equations: QS =-110+3PandQD =390–2P. a. What is the equilibrium price and quantity in Canada? b. Accurately graph the demand and supply along with the equilibrium. c. What is the consumer surplus and producer surplus at equilibrium? d. If Canada can trade snowboards freely with the rest of the world at the price of $80, how many snowboards will be produced and purchased in...

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...

1. Suppose we have the following supply and demand curves. QD = 500 − 2PD QS...

1. Suppose we have the following supply and demand curves. QD = 500 − 2PD QS = 100 + 2PS a) Determine the competitive equilibrium for this market. b) Suppose that we impose a per unit tax of $50 on this market. Determine the following: 1. The price that sellers receive. 2. The price that consumers pay. 3. The number of units sold given the tax. c) What is the share of the burden borne by consumers? What is the...

Subjects