Question

In: Economics

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 Canada?

e. Accurately graph the world price along with the quantities produced and purchased on the diagram you

constructed above.

f. If Canada engages in free trade with the trade at the price of $80, what is the consumer surplus and producer

surplus for the market of snowboards?

g. Suppose the Canadian government imposes at $10 tariff on snowboards, how many units will be produced and

purchased in Canada?

h. Accurately graph the tariff of $10 along with the quantities produced and purchased on the diagram you

constructed above.

i. With the $10 tariff on snowboards, what is the consumer surplus, producer surplus, government revenue, and

deadweight loss for the market of snowboards?

Q 2. Kent, Jasmine, and Hilary produce hoodies and slippers using only their labour. The table provides the information about the amount of labour that Kent, Jasmine, and Hilary must use to produce these hoodies and slippers. Assume that Kent, Jasmine, and Hilary each have 60 hours of labour available.

Amount of labour required to produce one slipper

4 hours of labour

3 hours of labour Hilary 2 hours of labour 2 hours of labour

a. Suppose Kent, Jasmine, and Hilary allocate their resources evenly in the production of each good, what will be the total production of hoodies and slippers?

b. Who has the absolute advantage in the production of hoodies? Slippers?

c. What is Kent’s, Jasmine’s, and Hilary’s opportunity cost of producing one hoodie in terms of slippers?

d. What is Kent’s, Jasmine’s, and Hilary’s opportunity cost of producing one slipper in terms of hoodies?

e. Who has the comparative advantage in the production of hoodies? Slippers?

f. If Kent, Jasmine, and Hilary specializes in the production in which they have a comparative advantage and they

only want to produce 40 hoodies, then how many units of hoodies and slippers will each of them produce?

Econ 201 Introduction to Microeconomics E. Choi

Amount of labour required to produce one hoodie

Kent

1 hours of labour

need fast

Expert Solution

Rahul Sunny answered 2 years ago

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...

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