Question
In: Economics
Suppose a country is large in the market for a particular good. There, the demand is...
Suppose a country is large in the market for a particular good. There, the demand is D = 9000 - 30P and the supply is S = -1000 + 10P. Moreover, when there is trade, this country is an importer, the import demand being MD = 10000 - 40P and the export supply being XS = -3000 + 60P.
1) In the absence of tariff, what is the total welfare in this country when there is trade?
2) What is the welfare change caused by a 50 dollar tariff?
3) What is the welfare change caused by a 175 dollar tariff?
4) What is the prohibitive tariff rate?
5) The optimal tariff is (Choose one):
a. Below 50 dollars.
b. Between 50 and 175 dollars.
c. Between 175 and 200 dollars.
d. Above 200 dollars.
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
1) Suppose a country has a Perfectly Competitive market for a good where Demand is given...
1) Suppose a country has a Perfectly Competitive market for a
good where Demand is given as: P = 100 -.2Q and Supply is given as:
P = 10 + 0.05Q.
A) In the absence of trade what the equilibrium values for P and
Q.
B) Suppose the country can import the good at a price of 20.
Determine the level of domestic consumption, the level of domestic
production and the level of imports.
2. Now suppose this country's market...
Consider a country that is small in the market of a particular good, facing an international...
Consider a country that is small in the market of a particular
good, facing an international price of 30. In this country, the
demand is given by D = 400 - 5P and the supply is given by
S = -200 + 10P.
1) What is the total welfare when there is free trade?
2) What is the welfare change caused by a 5 dollar import
tariff?
3) Should this country impose the 5 dollar tariff? (Yes/No)
4) Now assume...
The market demand for a particular good in city A is given by QA = 32...
The market demand for a particular good in city A is given by QA
= 32 − 0.5PA (for PA ≤ 64). This market is served by a single firm
(monopoly) whose marginal cost of production is 4 dollars per unit
(so total cost of producing Q units is 4Q). (a) Find the equation
for the firm’s marginal revenue function. Graph the demand,
marginal cost, and marginal revenue curves on one graph. (b) What
are the profit-maximizing price and quantity...
The market demand for a particular good in city A is given by Q(A) = 32...
The market demand for a particular good in city A is given by
Q(A) = 32 ? 0.5P (for P ? 64). This market is served by a single
firm (monopoly) whose marginal cost of production is 4 dollars per
unit (so total cost of producing Q units is 4Q).
(a) Find the equation for the firm’s marginal revenue function.
Draw the demand, marginal cost and marginal revenue curves on one
graph.
(b) What are the profit-maximizing price and quantity...
Suppose the incomes of buyers in a market for a particular normal good decrease and there...
Suppose the incomes of buyers in a market for a particular
normal good decrease and there is also a reduction in input prices.
Graphically show what happens to the demand and supply curve, and
comment on what would happen to the equilibrium price and quantity
in this market. Please label all parts of your graph to receive
full points.
The following information describes the demand schedule for the market for a particular good. Use this...
The following information describes the demand schedule for the
market for a particular good. Use this information to determine the
price elasticity of demand with a price change from $3,000 to
$3,300. Show your work.
Price
Quantity demanded
$3,000
240,000
$3,300
200,000
$3,600
160,000
$3,900
120,000
$4,200
80,000
Suppose that you are the owner of the firm that produces this
good and that you currently charge $3,000 per unit. Your closest
competitors charge $3300 for an identical product. Describe how...
The market for a particular good is described by the following demand and supply equations respectively:...
The market for a particular good is described by the
following demand and supply equations respectively: QD = 448 – 3.5P
and QS = 2.5P – 80. Consider that after much discussion among
policymakers and following a final vote, the government implements
a 20% ad valorem tax on sellers of the good. The market adjusts and
is currently in equilibrium.
1. After the tax is implemented, what
quantity of the good is traded?
2. What price do buyers pay?
3....
The market demand curve of a particular good is downward-sloping. Based on this information, which of...
The market demand curve of a particular good is
downward-sloping. Based on this information, which of the following
statements is correct regarding a price-taking firm producing that
good? (Justify the answer)
a) The demand curve faced by the firm is downward sloping
b) The firm chooses the price that equals its marginal cost
c) The firm chooses its output such that the marginal cost
equals the price
d) A price-taking firm cannot be profit-maximising
The market demand curve of a particular good is downward-sloping. Based on this information, which of...
The market demand curve of a particular good is
downward-sloping. Based on this information, which of the following
statements is correct regarding a price-taking firm producing that
good? (Justify the answer)
a) The demand curve faced by the firm is downward sloping
b) The firm chooses the price that equals its marginal cost
c) The firm chooses its output such that the marginal cost
equals the price
d) A price-taking firm cannot be profit-maximising
Suppose that the weekly demand for a good in a competitive market is Q = -40.1592P...
Suppose that the weekly demand for a good in a competitive
market is Q = -40.1592P + 401592. Further suppose that the typical
long-run weekly cost curve for a company in the market is: C(q) =
.75q^3- 54q^2 + 4500q + 4000
a) What is the long-run equilibrium price of the good (to two
decimal places)
b) How many companies will operate in the market (to two decimal
places)?
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