Question
In: Economics
1) Suppose the domestic supply (QS U.S.) and demand (QDU.S) for bicycles in the United States...
1) Suppose the domestic supply (QS U.S.) and demand (QDU.S) for bicycles in the United States is represented by the following set of equations:
QS U.S. = 2P
QDU.S. = 200 – 2P.
Demand (QD) and supply (QS) in the rest of the world is represented by the equations:
QS = P
QD =160 – P. Quantities are measured in thousands and price, in U.S. dollars. After the opening of free trade with the United States, if the world price of the bicycles settles at $60, answer the following questions:
a. What are the equilibrium price and quantity for US and ROW if there is no international trade? Draw the demand and supply curves on the graph, and label these points.
b. What are the quantities of the import and export if they can trade freely with the price of $60?
c. What is the effect of the shift from no trade to free trade on US consumer surplus? On producer surplus? What is the net national gain or loss for US?
d. Calculate the net benefit for US and ROW after trade to support your answers.
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
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The United States imports cheese from a variety of countries. The table gives the domestic supply of, and demand for, cheese in the United States.
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Domestic Supply for t-shirts, Qs = 100P - 1000. Domestic Demand, Qd = 1000 -1P. Draw...
Domestic Supply for t-shirts, Qs = 100P - 1000. Domestic Demand,
Qd = 1000 -1P. Draw the American (domestic) Market for shirts with
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a. The Chinese can supply an unlimited number of shirts for
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b. The Vietnamese can supply and unlimited number of shirts for
$7 a shirt.
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d. Assuming there is free trade i. How much is domestically
produced?...
Domestic Supply for t-shirts, Qs = 100P - 1000. Domestic Demand, Qd = 1000 -1P. Draw...
Domestic Supply for t-shirts, Qs = 100P - 1000. Domestic Demand,
Qd = 1000 -1P. Draw the American (domestic) Market for shirts with
an Equilibrium DOMESTIC Price of $19.8 a shirt.
a. The Chinese can supply an unlimited number of shirts for
$5.
b. The Vietnamese can supply and unlimited number of shirts for
$7 a shirt.
c. Draw in the Chinese and Vietnamese price curves. (flat lines)
d. Assuming there is free trade i. How much is domestically
produced?...
Domestic Supply for t-shirts, Qs = 100P - 1000. Domestic Demand, Qd = 1000 -1P. Draw...
Domestic Supply for t-shirts, Qs = 100P - 1000. Domestic
Demand, Qd = 1000 -1P. Draw the American (domestic) Market for
shirts with an Equilibrium DOMESTIC Price of $19.8 a shirt.
The Chinese can supply an unlimited number of shirts for
$5.
The Vietnamese can supply and unlimited number of shirts for $7
a shirt.
Draw in the Chinese and Vietnamese price curves. (flat
lines)
Assuming there is free trade
How much is domestically produced?
How much is domestically demanded?...
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...
Domestic Supply for t-shirts, Qs = 100P - 1000. Domestic Demand, Qd = 1000 -1P. Draw the American...
Domestic Supply for t-shirts, Qs = 100P -
1000. Domestic Demand, Qd = 1000 -1P. Draw
the American (domestic) Market for shirts with an Equilibrium
DOMESTIC Price of $19.8 a shirt.
The Chinese can supply an unlimited number of shirts for
$5.
The Vietnamese can supply and unlimited number of shirts for $7
a shirt.
Draw in the Chinese and Vietnamese price
curves. (flat lines)
Assuming there is free trade
How much is domestically produced?
How much is domestically demanded?
How much is...
The domestic demand for bicycles is given by Q = 32/0.3 – P/0.3 The foreign supply...
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Group of answer choices
$2.50
$3.50
$4.30
$5.50
Suppose that a market is described by the following supply and demand equations: QS = 2P...
Suppose that a market is described by the following supply and
demand equations:
QS = 2P
QD = 400 - 2P
Suppose that a tax of $40 is placed on buyers, so the new demand
equation is:
QD = 400 – 2(P + 40)
a) Solve for the new equilibrium. What happens to the price
received by sellers, the price paid by buyers, and the quantity
sold? Calculate the new consumer surplus, producer surplus and
total surplus.
b) Calculate the...
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