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Take a look at the sugar market: US demand: Q=60-2/3 P US domestic supply: Q=P Also, the US could import any quantity from world producers at (US$) 10/cents per lb
a) In a scenario with free trade- what would be equilibrium price in US, also what would be consumer surplus and producer surplus?
b) Assume FDA changes its mind and opens her US to sugar imports; however the government wants to promote domestic sugar production by giving a subsidy of 15 cents/lb
What would be new equilibrium price and quantity?
How much is domestic produced and how much is imported?
What is new consumer surplus and producer surplus?
What is deadweight loss compared to the scenario in question a)?
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The circular flow of income in an open economy An open economy is one in which international trade exists. Assume also that there is government spending and taxation. Thus
explain the terms abnormal profits and normal profits
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The Phillips curve in Lowland takes the form of ? = 0.04 - 0.5 (u - 0.05), where ? is the actual inflation rate and u is the unemployment rate. The Phillips curve in Highland takes
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#discuss the arguments for and against the use of trade barries in anay counrty
Write a one paragraph summary and three paragraphs that take the information in the article and relate it specifically to the circular flow model and the supply and demand curves.
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