Exhibit 33-2 Refer to Exhibit 33-2. The U.S. demand and supply for a good are shown....
Exhibit 33-2
Refer to Exhibit 33-2. The U.S. demand and supply for a good are shown. Under a policy of free trade, the world price is PW. At this price, what quantity of this good do U.S. consumers buy from U.S. producers and what quantity do they import from foreign producers?
A. Q2 from U.S. producers and (Q3 - Q1) from foreign producers
B. (Q3 - Q1) from U.S. producers and Q1 from foreign producers
C. Q3 from U.S. producers and nothing from foreign producers
D. Q1 from U.S. producers and (Q3 - Q1) from foreign producers
Homework Answers
Answer : The answer is option D.
At Pw price level the quantity supplied by U.S. producers is Q1. So, in free trade U.S. consumers will purchase Q1 quantity of the good from U.S. producers. But at Pw price level the quantity demanded is Q3. So, at Pw price level the market faces excess demand of (Q3 - Q1). Hence U.S. consumers will import (Q3 - Q1) quantity of the good from foreign producers. Therefore, option D is correct.
Add Answer to:
Exhibit 33-2
Refer to Exhibit 33-2. The U.S. demand and supply for a good are
shown....
Refer to the figure above, which shows domestic supply and demand. If P1 is equal to...
Refer to the figure above, which shows domestic supply and
demand. If P1 is equal to P2 (the world price) plus a tariff, then
the social loss from the tariff is equal to:
A) a + c
B) b
C) P1 ( Q3 - Q2)
D) P2 [(Q2 - Q1) + (Q4 - Q3)]
E) a + b + c
Price Q1 Q2 Q3 Qs Quantity
Refer to the graph above for all questions assume the graph represents the domestic demand and...
Refer to the graph above for all questions assume the graph
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Price $22 Domestic Supply D E 10 -World Price Domestic Demand 050 135 Quantity Refer to the graph above for all the questions. Assume the graph represents the domestic demand and supply of 90 hammers and the horizontal line is the current world price of hammers. tic economy if trade does not take place? dollars. 14 QUESTION 2 0.6 points How...
Figure 9-15 Price per Saddle Domeslic Supply 2 Tariff World Price Domestic Demand Qi 02 Q3...
Figure 9-15 Price per Saddle Domeslic Supply 2 Tariff World Price Domestic Demand Qi 02 Q3 Q Quantity of Saddles Refer to Figure 9-15. With trade and without a tariff, the price and domestic quantity demanded are Pi and Q1- Pi and Q4 P2 and Q2- P2 and Q3.
Q. 1. Suppose both supply and demand in a market are relatively inelastic. Will a tax...
Q. 1. Suppose both supply and demand in a market are relatively inelastic. Will a tax placed on the product in market generate a relatively large or small deadweight loss? Why? Q. 2. If the world price of a good exceeds the domestic price of the good, will the country export or import the good. In this scenario who gain from free trade: Domestic consumers or Domestic producers? Explain.
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5. Suppose the world price of steel is $120 per ton and that the U.S. can...
5. Suppose the world price of steel is $120 per ton and that the U.S. can buy all the steel it wants at this price. The daily demand and supply schedules for millions of tons of steel in the U.S. are as follows: Price ($ p/ton) U.S. Quantity Demanded U.S. Quantity Supplied 110 26 14 120 24 16 130 22 18 140 20 20 150 18 22 Draw the Demand and Supply curves. With free trade in steel, what price...
33. The following diagram shows the domestic demand and supply curves for sunglasses. Assume that...
33. The following diagram shows the domestic demand and supply curves for sunglasses. Assume that the world price for sunglasses is $10 per unit. 60 50 45 40 35 30 20 15 10 200 400 600 800 1000 Part : With no trade allowed, what are the equilibrium price and equilibrium quantity for sunglasses? Part 2: If the country allows free trade, (a) how many sunglasses will domestic consumers demand and how many sunglasses will domestic producers produce? (b) Will...
Consider two countries and a single good produced competitively. At Home, the supply and demand curves...
Consider two countries and a single good produced competitively. At Home, the supply and demand curves for this good are given by the following expressions where q' is quantity supplied and is quantity demanded: q"(p) = 100 + 2002 (P) = 1900 - 400p. In the foreign country, these curves are given by the following expressions where asterisks denote that they are foreign q** (P) = 100p q4*(p) = 600 -200p. 1. Solve for the closed economy (autarky) equilibrium price...
Refer to the figure above, which shows domestic supply and
demand. If P1 is equal to P2 (the world price) plus a tariff, then
the social loss from the tariff is equal to:
A) a + c
B) b
C) P1 ( Q3 - Q2)
D) P2 [(Q2 - Q1) + (Q4 - Q3)]
E) a + b + c
Price Q1 Q2 Q3 Qs Quantity
Refer to the graph above for all questions assume the graph
represents the domestic demand and supply of hammers
Price $22 Domestic Supply D E 10 -World Price Domestic Demand 050 135 Quantity Refer to the graph above for all the questions. Assume the graph represents the domestic demand and supply of 90 hammers and the horizontal line is the current world price of hammers. tic economy if trade does not take place? dollars. 14 QUESTION 2 0.6 points How...
Figure 9-15 Price per Saddle Domeslic Supply 2 Tariff World Price Domestic Demand Qi 02 Q3 Q Quantity of Saddles Refer to Figure 9-15. With trade and without a tariff, the price and domestic quantity demanded are Pi and Q1- Pi and Q4 P2 and Q2- P2 and Q3.
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Consider two countries and a single good produced competitively. At Home, the supply and demand curves for this good are given by the following expressions where q' is quantity supplied and is quantity demanded: q"(p) = 100 + 2002 (P) = 1900 - 400p. In the foreign country, these curves are given by the following expressions where asterisks denote that they are foreign q** (P) = 100p q4*(p) = 600 -200p. 1. Solve for the closed economy (autarky) equilibrium price...
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