Find how much does consumer surplus change

Assignment Help Econometrics

Reference no: EM13213908

Suppose U.S. domestic supply of crude oil is : Quantiy Supply (U,S) = (P+44) / 7.2 U.S. demand for crude oil is: QD = 20 ? (0.2) P\

a) If there were no international trade in crude oil, what would be the equilibrium price and quantity of oil in the U.S.? Calculate and graph this equilibrium.

b) Suppose the world price of crude oil is $15. What would be the equilibrium price and quantity under free trade? Find the price of oil, the total quantity traded, and the domestic quantity supplied. Assume you can treat foreign supply of oil as infinitely elastic (horizontal) at the world price. Calculate and add this to the graph from (a).

c) Comparing the free trade equilibrium to the no-trade equilibrium, how much does consumer surplus change? How much does producer surplus change?

Reference no: EM13213908

Questions Cloud

Besides elections and campaigns : Besides elections and campaigns, how do the major political parties influence public values and ideas?

Why the customer spends the proceeds of the loan : Suppose that the reserve requirement is 3 percent on the first $30 million of checkable deposits and 10 percent on checkable deposits in excess of $30 million. (Amounts on the balance sheet are in millions of dollars.) Assets Reserves $15.90 Loans..

Key features of the american population : Summarize the key features of the American population in the early eighteenth century; consider its sources, size, location, diversity and mobility.

Explain double-walled styrofoam cup calorimeters : Three Introductory Chemistry students each measured 50.0 mL of 1.0 M NaOH into "double-walled" styrofoam cup calorimeters. Then, Sue added 50.0 mL of 1.1 M HCl to her NaOH solution

Find how much does consumer surplus change : Suppose the world price of crude oil is $15. What would be the equilibrium price and quantity under free trade? Find the price of oil, the total quantity traded, and the domestic quantity supplied. Assume you can treat foreign supply of oil as inf..

Explain what is the ci- concentration in milliiequivalents : a sample of Ringer's solution contains the following concentractions (mEq/L) of cations: Na 147, K 4 and Ca2 4. If CI- is the only anion in the solution

Modern day criminal justice system : List, compare and contrast the 3 elements of the criminal justice system. How do these elements function to create our modern day Criminal Justice System?

What is the amount to use as the annual sales : What is the amount to use as the annual sales figure when evaluating this project? Why?

User Account

All Pages