Reference no: EM13117576
Question 1. Agronomia is a SMALL country that takes the world price of corn as given. Its domestic supply and demand for corn is given by the following:
D = 45 - 3P and S = 3P - 9
a. Assume initially that Agronomia does not open to trade. What is the autarky (no trade) equilibrium price and quantity?
b. Suppose Agronomia decides to engage in trade. Determine the quantity demanded, quantity supplied, and import given the world price (Pw) of $6 per bushel of corn. (Hints: Plug Pw into original equations).
c. If the Agronomia government imposes a tariff in the amount of $1 (i. e. t = $1), what is the new domestic price? What is the amount imported? (Hints: Plug the new domestic price into original equations).
d. Graph your results! (Hints: Figure 8-5 page 249).
e. Calculate consumer surplus, producer surplus, and government revenue BEFORE and AFTER tariff is applied.
f. Calculate the terms-of-trade gain. Explain.
g. What is the net effect of the tariff on Agronomia's welfare?
Question 2. Refer to Problem 1 above. Suppose the Agronomian 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. Remember, for every level of import quota (in perfect competition), there is an equivalent import tariff that would lead to the same Home price and quantity of imports. Here is how to get the new domestic price with quota: subtract supply from demand, then equate with quota limit, which is 12 bushels.
b. Calculate the quota rent.
c. Assuming that the quota licenses are given to domestic producers, what is the net effect of the quota on Agronomia's welfare?
d. Assuming that the quota rents are earned by foreign exporters, what is the net effect of the quota on Agronomia's welfare?
|
Explain economic and philanthropic csr
: energy regulating device that regulate the use of power sources in home and business. what is the ethical, legal, economic and philanthropic csr
|
|
Calculate the present discounted value
: Calculate the present discounted value of each career path at a discount rate of 5% and at a discount rate of 15%.
|
|
Calculate the present value of the costs
: Calculate the present value of the costs and the present value of the benefits of each career path assuming an interest rate of 3% and then again at an interest rate of 10%. Which of the career paths should she pursue under each interest rate?
|
|
Make the marketing strategy for the product
: Assume you are the Chief Marketing Officer of the company launching the product or service that you have selected. Make the marketing strategy for the product or service in terms of
|
|
Calculate the quota rent
: Calculate the quota rent and asuming that the quota licenses are given to domestic producers, what is the net effect of the quota on Agronomia's welfare?
|
|
Explain hr roles and responsibilities
: Explain HR Roles and Responsibilities. Use at least five references from the reading assignment, Internet articles, Electronic Reserve Readings articles, or HR journal articles to support your paper
|
|
Is such a trade possible in scenario
: If the local environmental quality in Tennessee declines as a result of this trade, then indicate a potential Coase agreement that could avoid the environmental decline and would still make the trade profitable to both parties ? Is such a trade po..
|
|
Explain how do management and leadership differ
: How do "management" and "leadership" differ and how are "management" and "leadership" similar? Do leaders and managers move between both of these roles?
|
|
Examine the residuals of your estimated equation
: Examine the residuals of your estimated equation to determine whether any of your countries is a regression residual. and present your data in a table showing the names of the variables. Make sure the full definitions.
|