Determine the free trade equilibrium

Assignment Help Physics

Reference no: EM131001940

1. The nation of Acirema is "small" and unable to affect world prices. It imports peanuts at the price of $10 per bag. The demand curve is
D= 400 - 10P.

The supply curve is

S = 50 + 5P.

Determine the free trade equilibrium. Then calculate and graph the following effects of an import quota that limits imports to 50 bags.

a. The increase in the domestic price.
b. The quota rents.
c. The consumption distortion loss.
d. The production distortion loss.

2. If tariffs, quotas, and subsidies each cause net welfare losses, why are they so com- mon, especially in agriculture, among the industrialized countries such as the United States and the members of the European Union?

3. Suppose that workers involved in manufacturing are paid less than all other workers in the economy. What would be the effect on the real income distributionwithin the economy if there were a substantial tariff levied on manufactured goods?

Reference no: EM131001940

Questions Cloud

What is the probability that a male age sixty will die : Actuary A decides that the force of mortality for male lives is 1.5 times the force of mortality for females lives, at all ages over 60. What is the probability that a male age 60 will die within 10 years, under A's assumption?

About theory of industrial organization : One of these firms is considering opening up a new product line, in a market in which it would be the only firm. So, adjusting the notation to now capture demand in the monopolistically competitive industry with Q1(p1) = 140 − p1, and the demand it w..

Using cane sugar or corn syrup as sweeteners : Suppose that soda producers can choose between using cane sugar or corn syrup as sweeteners. If the price of corn syrup rises, what impact would you expect this to have on the demand for cane sugar? Briefly explain. If the price of cane sugar rises, ..

Where is a good place to look or seek advice : If you need help with APA citations, where is a good place to look/seek advice

Determine the free trade equilibrium : Suppose that workers involved in manufacturing are paid less than all other workers in the economy. What would be the effect on the real income distributionwithin the economy if there were a substantial tariff levied on manufactured goods?

Principal place of business in michigan : Pet Food Company Inc., is incorporated in Delaware, with its principal place of business in Michigan. Alice asks you whether she can sue in federal court. What would you tell her and why?

What is cross-price elasticity of socks with respect to shoe : Suppose that when the price of shoes increases by 5%, the quantity demanded for socks decreases by 10% and the quantity demanded of sandals increases by 4%. What is the cross-price elasticity of socks with respect to shoes? Are shoes and socks relate..

Methods for reconciling an employer : List and describe the methods for reconciling an employer's Revenu Québec (RQ) account.

What is the income elasticity of gasoline : Suppose that when income increases by 10%, the quantity demanded of gasoline increases by 3%. What is the income elasticity of gasoline? Based on your answer, is gasoline a normal or inferior good? Is it a necessity or a luxury?

User Account

All Pages