Questions
The following graph shows the domestic supply of and demand for maize in Bangladesh.
The following graph shows the domestic supply of and demand for maize in Bangladesh. The world price (Pw) of maize is $260 per ton and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of maize and that there are no transportation or transaction costs associated with international trade in maize. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place.
If Bangladesh is open to international trade in maize without any restrictions, it will import _______ tons of maize.
Suppose the Bangladeshi government wants to reduce imports to exactly 100 tons of maize to help domestic producers. A tariff of $_______ per ton will achieve this.
A tariff set at this level would raises _______ in revenue for the Bangladeshi government.
In: Economics
The following graph shows the domestic supply of and demand for wheat in Bolivia. The world...
4. Effects of a tariff on international trade
The following graph shows the domestic supply of and demand for wheat in Bolivia. The world price (Pw) of wheat is $265 per bushel and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of wheat and that there are no transportation or transaction costs associated with international trade in wheat. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place.
If Bolivia is open to international trade in wheat without any restrictions, it will import _______ bushels of wheat.
Suppose the Bolivian government wants to reduce imports to exactly 100 bushels of wheat to help domestic producers. A tariff of $_______ per bushel will achieve this.
A tariff set at this level would raise $_______ in revenue for the Bolivian government.
In: Economics
If US and Mexico are currentlynot engaging in international trade, determine the quantity purchased and produced in each country.
Assume that all prices are stated in US dollars. Ignore quality differences in the product.
US demand and supply Mexico demand and supply
Quantity demanded | Quantity supplied | Price | Quantity demanded | Quantity supplied |
1000 | 0 | $1 | 600 | 0 |
800 | 800 | $3 | 500 | 50 |
700 | 1000 | $5 | 400 | 100 |
600 | 1200 | $7 | 350 | 150 |
500 | 1400 | $8 | 200 | 200 |
400 | 1600 | $10 | 0 | 300 |
1. If US and Mexico are currentlynot engaging in international trade, determine the quantity purchased and produced in each country. Justify your answer
2. If US and Mexico engage in international trade, determine the world price of corn, world consumption of corn, and world production of corn. Justify your answer.
In: Economics
The demand curve for T-shirts in the US is given by Q = 100 – 2*P....
The demand curve for T-shirts in the US is given by Q = 100 – 2*P. Suppose that there are no T-shirts produced in the US, but they can be imported either from Mexico or from the rest of the world. The price of T-shirts in Mexico is $20, and the price from the lowest-cost supplier in the rest of the world is $15. The US charges a tariff of $10 per unit imported.
a) Consider the case where there is no PTA, so that every country must pay the same tariff. Compute the US consumer surplus in this case.
b) Now, suppose that the US and Mexico sign a PTA that eliminates the tariff on T-shirts from Mexico, but leaves the tariff on T-shirts from the rest of the world unchanged. Compute the US consumer surplus in this case.
c) Compute trade creation and trade diversion due to the PTA.
In: Economics
Suppose the equation for the demandcurve in a market is PD=100-1.5QD, where QDis the...
Suppose the equation for the demand curve in a market is PD=100-1.5QD, where QDis the quantity demanded and P is the price. Also, suppose the equation for the supply curve in the same market is PS=0.5QS , where Qs is the quantity supplied. Suppose there is an external cost of $12 associated with the production of each unit of the good.
What are the socially optimal quantity and price?
P=$37; Q=50
P=$25; Q=50
P=$22; Q=44
P=$34; Q=44
Suppose that to internalize the externality, a tax of $12 is imposed by government. Then total surplus which is
$2500 before tax will decrease to $1936 after tax.
$2500 before tax will decrease to $2200 after tax.
$1900 before tax will increase to $1936 after tax.
$1900 before tax will increase to $2200 after tax.
In: Economics
A monopolist faces the following demand curve, marginal revenue, total cost curve and marginal cost curve...
A monopolist faces the following demand curve, marginal revenue, total cost curve and marginal cost curve for its product: Q = 200 - 2P ; MR = 100 - Q ; TC = 5Q ; MC = 5
a) What level of output maximizes total revenue?. b) What is the profit maximizing level of output?. c) What is the profit maximizing price?. d) How much profit does the monopolist earn? e) Suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing level of output? f) Suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing price? g) Suppose that a tax of $5 for each unit produced is imposed by state government. How much profit does the monopolist earn?
In: Economics
BBT Production is promoting a concert in Kuala Lumpur. The bands will receive a flat fee...
BBT Production is promoting a concert in Kuala Lumpur. The bands will receive a flat fee of RM7 million in cash. The concert will be shown worldwide on closed-circuit television. BBT will collect 100% of the receipts and will return 30% to the individual local closed-circuit theater managers. BBT expects to sell 1.1 million seats at a net average price of RM13 each.
Required:
|
a) |
The general manager of BBT Production is trying to decide what amount to spend for advertising. What is the most BBT could spend and still break even on overall operations, assuming sales of 1.1 million tickets? |
|
b) |
If BBT desires an operating income of rm500,000, how many seats would have to sell? Assume the average price is RM13 and total fixed cost (advertising above) |
In: Accounting
Watson Power Co. needs to raise $2 million as a basic source of long-term funds to run their business. The firm has the following alternatives:
Watson Power Co. needs to raise $2 million as a basic source of long-term funds to run their business. The firm has the following alternatives:
Bond: to sell 20 years bond, 10% coupon rate (with semiannual coupon payment) on par value $1,000, issued at 6% discount, floatation cost is 1.5% of par and corporate tax rate is 25%.
Preferred stock: to issue stock that has a 7.5% annual dividend, floatation cost of 3.5% of $100 par value and the price of 2.5% above par.
Common stock: the current dividend is $1.50 and the market price is $56 per share. The annual growth rate of dividend is 7% and the floatation cost is $2.20.
a) Calculate the cost of each alternative of financing.
b) Which alternative should Watson Power Co. choose? Why?
In: Finance
A. A competitive firm has a short run total cost curve represented by the following equation:C(q)...
A. A competitive firm has a short run total cost curve represented by the following equation:C(q) = q2/4 + 50
a. (4) Derive how many units a profit maximizing competitive firm produce as a function of P(price)(qs(p)=).
b. (2) If there are 100 firms in the market, derive the supply curve.
c. (6) The market demand is 1200 –100P derive the market price and the firm’s profit.
d.(2)Given your answer in c, explain what will start to happen in the long run.
B. Graph a competitive firm that would operate in the short run, but exit in the long run. Show its optimal output, revenue and COSTSsuch that it would operate in the short run but not the long run. Include all curves needed for this..
In: Economics
Banana Inc. is about to unveil their latest flagship phones, jPhone 11 pro in some few...
Banana Inc. is about to unveil their latest flagship phones, jPhone 11 pro in some few months. After a survey conducted by the company, they realized that the market demand for jPhone 11 pro is characterized by the following equation; P= 4000-0.5Qd. Also, the supply curve for Banana Inc is characterized by the following equation; P=0.5Qs.
a. With the information above, solve for the equilibrium price and quantity.
b. Suppose the government imposes a per unit tax of $100 per unit produced. Determine the new equilibrium price and quantity and illustrate your answer on the diagram. Also calculate the consumer surplus and producer surplus before and after the tax
c. Calculate the dead-weight loss as a result of the tax imposed by the government.
d. Calculate the government tax revenue. (1 mark)
In: Economics