The domestic market of a small country is described by the following supply and demand curves: Qs = P-50; Qd = - P + 100. World price P = 50. Determine the volume of losses and benefits of domestic producers and consumers, provided that there is free
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The domestic market of a small country is described by the following
Qs = P-50; Qd = - P + 100.
World price P = 50.
Determine the volume of losses and benefits of domestic producers and consumers, provided that there is free competition in the global and domestic markets.
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- Country C imports 80,000 metric tons of steel from Country U and produces domestically 80,000 metric tons per year. The world price of steel is $500 per metric ton. Assuming linear schedules, research analysts estimated the price elasticity of domestic supply to be 0.50 and the price elasticity of domestic demand to be -0.25 in the current market equilibrium. Country C imposes an import duty of $150 per metric ton that caused the world price to fall by 10%. Analyse the effects of the consumer surplus, producer surplus, government revenue, and deadweight loss in the Country C steel market with the tariff. What are the terms of trade of the Country C steel market after the tariff was imposed? Explain the welfare effects of both countries.Country C imports 80,000 metric tons of steel from Country U and produces domestically 80,000 metric tons per year. The world price of steel is $500 per metric ton. Assuming linear schedules, research analysts estimated the price elasticity of domestic supply to be 0.50 and the price elasticity of domestic demand to be -0.25 in the current market equilibrium. Country C imposes an import duty of $150 per metric ton that caused the world price to fall by 10%. Summarise and analyse the quantity of steel produced, consumed and imported in Country C. Analyse and discuss the welfare gain from trade in Country C. Show your answers of the steel market with a proper diagram. Imports steel from Country U = 80,000 metric tons of steel Produce domestically = 80,000 metric tons per year Country C total steel consumption = 160,000 metric tons per year Price of steel per metric ton = $500Country C imports 80,000 metric tons of steel from Country U and produces domestically 80,000 metric tons per year. The world price of steel is $500 per metric ton. Assuming linear schedules, research analysts estimated the price elasticity of domestic supply to be 0.50 and the price elasticity of domestic demand to be -0.25 in the current market equilibrium. Country C imposes an import duty of $150 per metric ton that caused the world price to fall by 10%. Summarise and analyze the quantity of steel produced, consumed, and imported in Country C. Analyse and discuss the welfare gain from trade in Country C. Show your answers to the steel market with a proper diagram.
- Country C imports 80,000 metric tons of steel from Country U and produces domestically 80,000 metric tons per year. The world price of steel is $500 per metric ton. Assuming linear schedules, research analysts estimated the price elasticity of domestic supply to be 0.50 and the price elasticity of domestic demand to be -0.25 in the current market equilibrium. Country C imposes an import duty of $150 per metric ton that caused the world price to fall by 10%. (a) Summarise and analyse the quantity of steel produced, consumed and imported in Country C. Analyse and discuss the welfare gain from trade in Country C. Show your answers of the steel market with a proper diagram. (b) Analyse the effects of the consumer surplus, producer surplus, government revenue and deadweight loss in the Country C steel market with the tariff. What are the terms of trade of the Country C steel market after the tariff was imposed? Explain the welfare effects of both countries.Consider a large country with the following inverse demand and supply functions of golf clubs: P = 100 - Q. P = 20 + Q. The world price of golf clubs is 80. This country's government decided to support domestic golf club producers and introduced an export subsidy of 20, which led to a decrease in the world price to 70 per club. The world's deadweight loss, associated with this subsidy is then equal toZenobia is a small country that takes the world price of barley as given. Its domestic supply and demand for barley are given by: D = 60 – 4P S = 4P – 12 7 euro for every bushel of barley Suppose the Zenobian government applies an import quota that limits imports to 12 bushels. a) Determine the quantity demanded, quantity supplied, and new domestic price with the quota. b) Calculate the quota rent. c) Assuming that quota licenses are allocated to domestic producers, what is the net effect of the quota on Zenobia's welfare? d) Assuming that quota rents are earned by foreign exporters, what is the net effect of the quota on Zenobia's welfare?
- Question 12 One of Morocco's top import goods is wheat. Domestic market demand is described as Qn = 69 – 3P, and domestic producers supply wheat according to the function Qs = (5/6)P, where Q is measured in millions of bushels. The perfectly competitive world price of wheat is $6 per bushel. million bushels of wheat are imported under the competitive world price. Suppose the Moroccan government introduces an import quota equal to 23 million bushels of wheat. The new price is $_ per bushel of wheat. million. You must draw and label a graph that As a result of this import quota, domestic producers gain $. enables the TA to follow all of your intermediate steps. Suppose the Moroccan government wanted to achieve the same outcome (reduce imports to 23 million bushels of wheat) with a tariff instead. Relative to the import quota equilibrium, a tariff would cause market efficiency to _million. You must add on to your existing graph to help (increase/decrease/be the same) by $_ the TA to…Suppose that the world price of oil is roughly $100.00 per barrel and that the world demand and total world supply of oil equal 34 billion barrels per year (bb/yr), with a competitive supply of 20 bb/yr and 14 bb/yr from OPEC. Statistical studies have shown that the short−run price elasticity of demand for oil is −0.05, and the short−run competitive price elasticity of supply is 0.10. Using this information, derive linear demand and competitive supply curves for oil. Let the demand curve be of the general form Q=a−bP and the competitive supply curve be of the general form Q=c+dP, where a, b, c, and d are constants. The equation for the short−run demand curve is? The equation for the short−run competitive supply curve isDomestic demand for fidget spinners in the domestic economy is characterized by the equation P = 100 – 2Q, domestic supply is characterized by the equation Q = P10, and the world price is equal to 60. Then the export subsidy of 10 per unit will lead to a decrease in the world price by 10 increase domestic exports by 10 increase domestic exports by 15 change nothing
- Domestic demand for fidget spinners in the domestic economy is characterized by the equation P=100−2Q, domestic supply is characterized by the equation Q=P−10, and the world price is equal to 60. Then the export subsidy of 10 per unit will a) increase domestic exports by 15 b) change nothing b) lead to a decrease in the world price by 10 c) increase domestic exports by 10Suppose that the world price of oil is roughly $90.00 per barrel and that the world demand and total world supply of oil equal 34 billion barrels per year (bb/yr), with a competitive supply of 20 bb/yr and 14 bb/yr from OPEC. Statistical studies have shown that the long-run price elasticity of demand for oil is -0.40, and the long-run competitive price elasticity of supply is 0.40. Using this information, derive linear demand and competitive supply curves for oil. Let the demand curve be of the general form Q=a-bP and the competitive supply curve be of the general form Q=c+dP, where a, b, c, and d are constants. The equation for the long-run demand curve is A.Q=47.50-0.15P. B.Q=13.50-47.50P. C.Q=47.50-P. D.Q=47.50+0.15P. E.Q=13.50-0.15P.Price P1 P2 Quantity Q1 Q2 Q3 Figure 3 Domestic market for a good Figure 3 shows a country's domestic market for a good. There is perfect competition. The supply curve, S, is the domestic producers' supply curve for the good. D is the domestic consumers' demand curve. With no trade, the domestic market is in equilibrium at a price of P1. The world price for the good is P2. Which one of the following statements is correct? Select one: O With free trade domestic demand is Q, With free trade the quantity of imports is Q2 - Q1 O With no trade domestic demand is Q3 With free trade domestic producers supply Q1