Happy Domestic Market No Trade conomics Mentor No International Trade Consumer surplus, on the other hand, is the difference between the price consumers are willing and able to pay for contacts and the actual price that they pay. Vivan 0- Graphically, consumer surplus is the area from the market price up to the demand curve and over to the equilibrium quantity. • Quantity Supplied Quar Domestic Market Price Quantity Supplled Quantity Den 248 Got it! So what is total consumer surplus in the contact lens market? 20 20 220 40 40 200 Julio 60 60 180 80 80 160 100 109 140 120 120 120 140 140 100 Enter a response then click Submit below 160 160 80 180 180 60 200 203 40 220 220 Submit 20 240 240
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- Explain with the help of diagrams:1. Assume that the Indian JuteIndustry is at present in a equilibrium state with the producers supplyingjute bags only to the domestic market atthe prevailing market prices. Apart from domestic suppliers, Indian juteindustry faces competition from Bangladesh. Explain with the help ofsupply-demand curves how the following events affect the equilibrium in thejute industry?a. Poor domestic demandb. Increasedcompetition from Bangladeshc. Cement industry,which is one of the largest users of jute bags,exempted from mandatory jute packagingd. Farmers, instead ofproducing jute, use their farm lands for some other purposes.China is a major producer of grains, such aswheat, corn, and rice. Some years ago, the Chinesegovernment, concerned that grain exports weredriving up food prices for domestic consumers,imposed a tax on grain exports.a. Draw the graph that describes the market for grainin an exporting country. Use this graph as thestarting point to answer the following questions.b. How does an export tax affect domestic grainprices?c. How does it affect the welfare of domesticconsumers, the welfare of domestic producers,and government revenue?d. What happens to total welfare in China, asmeasured by the sum of consumer surplus,producer surplus, and tax revenue?7) Refer to the Figure 3 below, the total emclency loss ls Figure 3 Price, P Pr Pw D D D' Quantity, O Select one: O AD+C O B.D+C+d OC.c+e O D.b+d
- > O ho signment - ECN204 021- Introductory Macroeconomics - W2023 apter 17 Assignment i 1 B 02:44:19 W b Success Confirmation 4+ HelpConsider a small country that exports steel. Supposethat a “pro-trade” government decides to subsidizethe export of steel by paying a certain amount foreach ton sold abroad. How does this export subsidyaffect the domestic price of steel, the quantity ofsteel produced, the quantity of steel consumed, andthe quantity of steel exported? How does it affectconsumer surplus, producer surplus, governmentrevenue, and total surplus? Is it a good policy fromthe standpoint of economic efficiency? (Hint: Theanalysis of an export subsidy is similar to the analysisof a tariff.)Suppose the U.S. imposes a trade embargo onNorth Korea in order to exert political pressureon the government. Consider how the embargowill affect U.S. producers. Under what conditionswould they support the embargo? Why mightthey oppose it?
- Which of the following results from a subsidy? Select one: O a. world output is increased O b. exports increase O c domestic production costs increase © d. imports increaseQUESTION 11 If the demand for a good increases when incomes rise and decreases when incomes fall, the good is called a normal good. See O True O False QUESTION 12 When exports are subsidized, O a. nations export products in which they have an absolute advantage O b. the amounts of actual labor, raw material, and capital costs of production decrease O C. gains from trade in terms of world output increase O d. nations export products in which they have a comparative advantage e. income is transferred from tax payers to the exporters of subsidized goods QUESTION 13 The graph shows the market for wheat in an economy. The equilibrium price and quantity of wheat bought and sold in the don trade are P2 and Q2, respectively. If the world price of wheat is P3, the change in producer surplus due to free trade will be eq Figure 18.1 Domestic Supply PA Click Save and Submit to save and submit. Click Save All Ansuwers to save all answers.Supply chain shortages have limited the number of microchips available to car manufacturersin the US. Since every new car needs microchips to control it, we can think of a limit on thenumber of microchips as a quota on the production of new cars. If this quota is binding,which of the following may be a market consequence of a production quota on new cars in theUS market? Do not worry about the underlying facts; only whether the explanations makeeconomic sense given our model. (Select one or more) (a) The quantity supplied of new cars will rise to meet the quota.(b) The quantity supplied of new cars will fall to meet the quota.(c) The quantity supplied is unaffected by a binding quota.(d) The price of new cars will rise until there is no excess demand.(e) The price of new cars will fall until there is no excess demand.(f) Consumer surplus will increase as a result of the quota.(g) Consumer surplus will decrease as a result of the quota.(h) Consumer surplus will be unaffected by the…
- In 2018, a cold front in Barbados increased both the demand for water heaters andgasolines. The usage of gasoline was 581 tonnes, an increase from 499 tonnes in theprevious year. The Petroleum Company of Barbados advised Government officials thatdemand could outweigh supply and asked companies to increase the supply. They alsoasked major gasoline users, such as power plants, to reduce demand.i. Illustrate the effect of the cold front on the demand for gasoline using a demandcurve diagram over the two years. ii. Assuming the Petroleum Company of Barbados did not issue a directive for anincrease in supply and a decrease in demand, explain the problem that would existin the economy and how would this be corrected over time. iii. Illustrate the effect of major gasoline suppliers increasing supply as well as usersreducing their demand. iv. Discuss one factor EACH that you think influence demand and supply for waterheaters. Provide examples v. Is demand for gas is price elastic or price…In 2018, a cold front in Barbados increased both the demand for water heaters andgasolines. The usage of gasoline was 581 tonnes, an increase from 499 tonnes in theprevious year. The Petroleum Company of Barbados advised Government officials thatdemand could outweigh supply and asked companies to increase the supply. They alsoasked major gasoline users, such as power plants, to reduce demand. i. Illustrate the effect of the cold front on the demand for gasoline using a demandcurve diagram over the two years. ii. Assuming the Petroleum Company of Barbados did not issue a directive for anincrease in supply and a decrease in demand, explain the problem that would existin the economy and how would this be corrected over time.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 13