A fruit is traded in a competitive world market, and the world price is $10 per pound. The consumer quantity in this price is 100 million tonnes. One year later, overall fruit prices increase to $15 and total consumer level fall to 90 million tonnes. Under this circumstance, what is the price elasticity of demand fruiti
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- The following graph shows intra-industry trade in the United States for two types of yogurts: Yoplait (a famous French brand) and Dannon (a famoud American brand): -1 13 12 11 10 A 9 8G 7 2 Price 1. 0 0 2 US Market for Yoplait (Y) Supply of Yoplait 5 6 7 Loss of LQM. Gain of LQM. Loss of KLMR. Demand for Yoplait Gain of KLMR. Yoplak 9 10 11 12 13 14 12 Price 11 10 A US Market for Dannon (D) 2 3 4 5 7 Supply of Dannon Refer to the above graph. At the price of $6 for D, intra-industry trade leads to which of the following for the United States: 8 Demand for Dannon Dannon 9 10 11 12 132. Fredonia does not grow any wheat, but domestic demand is described by P=100-.5Q. Initially, wheat is in infinitely elastic supply to Fredonia from Tralfamadore at a price of 30. a. Fredonia levies of tariff of 20 on imports of wheat into the country. Draw a demand curve showing the price and quantity of wheat demanded as well as the tariff revenue. b. Fredonia now enters into a free trade agreement with Sylvania. Wheat is available from Sylvania in infinitely elastic supply at a price of 40. On your diagram indicate the price and quantity of wheat demanded after the formation of the free trade area. Show the change in consumer surplus and change in government revenue that result from formation of the free trade area. c. Compute the change in consumer surplus, the change in tariff revenue, and the change in welfare resulting from the formation of the free trade area. Explain your answer. d. What term do economists use to describe the phenomenon illustrated in this example? Fully…5. Demand is given by QD = 6000 - 50P. Domestic supply is QS = 25P. Foreign producers can supply any quantity at a price of $40. A. If foreign producers can sell in the domestic market, what is the equilibrium price? What is the equilibrium quantity? How much is sold by domestic and foreign producers, respectively? B. Under domestic government pressure, foreign producers voluntarily agree to restrict their goods. What will happen to the price and quantity? What will happen to the amount that domestic producers supply? What will happen to revenues of domestic and foreign producers?
- A. What effect will each of the following have on the demand for product B? 1. Product B becomes more fashionable. 2. The price of substitute product C falls. 3. A decline in incomes if B is an inferior product. 4. Consumers anticipate the price of B will be lower in the near future. 5. The price of complementary product D falls. 6. Foreign tariff barriers on B are eliminated. B. What effect will each of the following have on the supply for product B? 1. A technological advance in the methods of producing B. 2. A decline in the number of firms in industry B. 3. An increase in the price of resources required in the produUction of B. 4. The expectation that the equilibrium price of B will be lower in the future than it is currently. 5. A decline in the price of product A, a good whose production requires substantially the same techniques as does the production of B. 6. The levying of a specific sales tax upon B. 7. The granting of a 50-cent per unit subsidy of B produced.3. Suppose you are a manufacturer of milk and it produces 900 liters and sells it for $ 15 Lt and due to social development policies, the government decides that the price of the good should be lowered by one peso, therefore it should be sold at $ 14 per liter, with which people will have more access to buy it and will influence an increase in the quantity demanded, now having to produce 1,300 liters of the good. a. Determine the elasticity of demand.b. Determine the degree of Lerner's monopoly power.14.Consider these elasticities of demand of tourists in Austria Destination Income Elasticity Price elasticity Austria -0.1 -1 Italy 0.8 -1.5 Cuba 2 -2 Kazakhstan 0 0 Classify elasticity inferior\normal, and price elasticity elastic\inelastic. What could be plausible explanations for these numbers and what implications have for policy makers and tourists organizations in the destination countries?
- What Type of attraction are in Uk? and which are the main Characteristcs of supply? (what make different from the rest of the world)7. Effect of quotas on local consumers and producers The following graph shows the U.S. domestic market for towels. PRICE (Dollars) 20 18 16 14 ୯ 12 10 bo 4 2 0 0 Domestic Demand 12 Domestic Supply 24 36 QUANTITY (Millions of towels) 48 60 In the absence of foreign trade, the equilibrium price of a towel is s domestic quantity supplied equal million towels. Price (World) Price (Quota) . At this price, both the domestic quantity demanded and the Suppose that trade between the United States and China is open and that the United States initially imposes no tariffs or quotas on towels imported from China. Assume that China has a comparative advantage in producing towels and charges the world price of $6 per towell. (Note: Throughout the problem, assume that the amount demanded by any one country does not affect the world price of towels.) On the previous graph, use the grey line (star symbol) to indicate the world price of towels. At the world price of $6 per towel, the quantity of towels…How much the cost of a tariff pass through the prices paid in the United States depends on a. supply elasticities, number of complementary goods, and response of domestic producers b. demand elasticities, number of complementary goods, and response of domestic producers c. supply elasticities, number of complementary goods, and weather the goods are used as parts in integrated supply chains d. demand elasticities, number of substitute goods, and whether the goods are used as as parts in integrated supply chains
- Your firm receives revenue of $40MM per year from Product A and $90MM per year from Product B. The own- price elasticity of demand for Product A is -1.5. The cross-price elasticity of demand between Product A and Product B is -1.8. Suppose you increase the price of Product A by two percent: a. How much will Product A’s revenue change? b. How much will Product B’s revenue change?The following graph shows intra-industry trade in the United States for two types of yogurts: Yoplait (a famous French brand) and Dannon (a famoud American brand): 13 12 11. 10 A 9 83 7 2 1 0 -1 10 1 -11 CHG. O GHOI. O HLP. US Market for Yoplait (Y) Supply of Yoplait O GHPK. 8 Demand for Yoplait 9 10 11 12 13 Yoplak 15 12 Price 11 10 A 0 1 2 US Market for Dannon (D) Refer to the above graph. At the price of $6 for Y, and relative to an autarkic situation, intra- industry trade leads to a loss for producers of: Supply of Dannon Demand for Dannon Dannon 10 11 12 13The demand and supply for houses (in millions of houses per year) is shown below. If the worldwide price of houses is $350,000, the international housing market would: Quantity Demanded Quantity Supplied Price per Home 350,000 340,000 330,000 320,000 U.S. Residents 10 20 40 60 Rest of World 15 25 45 65 Experience a shortage Experience a surplus Be at equilibrium Worldwide Market Price per Home 350,000 340,000 330.000 320,000 U.S. Residents 30 25 20 15 Rest of Worldwide World Market 40 35 30 25