1) For Belgium, Demand : P=700-2Qd or, Qd=350-P/2
and Supply : P=40+(Qs/5) or, Qs=5P-200
For equilibrium , Demand = Supply
or, 350-P/2 = 5P-200
or, 700-P=10P-400
or, 11P=1100
or, P=100
and Q= 5*100-200=300
2.a) When Belgium trades freely in the world market at a price of $120 , it will gain profit. As cost of production of writing paper ($100) is less than free trade price ($120), Belgium has comparative advantage in the production of writing paper.
b) Domestic production will be at price $120 i.e, Qs=5P-200 or, Q=5*120-200=400
Domestic consumption will be at $120 i.e, Qd=350-P/2 = 350-120/2 = 290.
c) Belgium will export writing paper . Amount to be imported = 400-290=110
3) In Belgium , due to shift from autarky to free trade, quantity produced in Belgium increased with a greater profit being enjoyed by domestic producers.However, due to free trade domestic consumers will incur loss due to higher prices. This causes decrease in domestic consumption.The result is shown in the diagram below.
4) when autarky price for ROW is $150, reverse phenomenon is seen. When ROW goes for free trade, world price will be $120. In this case , producers of ROW incur loss while consumers of ROW gain profit. The case is shown in the diagram below.
I know that the eq. price is 172 and quantity is 172 for
France. I know that the rest of the world has a comparative
advantage. I need help with Part 2, questions: b, c, and 3.
Thanks!
BTTUx AParagraph Stylas 4. Refer to igure above. Which area represents the Increase in consumer surplus when the price falls from Ps to Ph? a. ABD b. ACF c. DEF d. BCFD Refer to figure above. When the price falls from P...
Price So 1 Po PwT Pw 4 5 9 10 6 7 11 12 13 14 Do Qi 2 0 04 Qs Qantity The graph above depicts the domestic market for good X. Domestic demand and supply are represented by DD and So respectively. The domestic price is Po and the world price is Pw. The price Pw-T, represents the world price plus a tariff. If the domestic country's government wanted to maximize total surplus then O the government should...
can you answer question 3 only plz thank you i need it as soon
as possible
Home demand: D 100-20P Home supply: S 30+20P What is the import demand schedule in home country, what is the equilibrium price without trade? b Please draw the demand and supply curves at home, calculate and mark domestic consumer surplus and producer surplus without trade on the graph. 2 Foreign demand D 80-20P* Foreign supply: S 50 20P* What is the export supply schedule...
No need to explain in detail. I just want to check my answer.
But please provide me a formula.
1. The principle of comparative advantage asserts that a. not all countries can benefit from trade with other countries. b. the world price of a good will prevail in all countries, regardless of whether those countries allow international trade in that good. c. countries can become better off by exporting goods, but they cannot become better off by importing goods. d....
To answer the next question, use the following graph showing the
domestic demand and supply curves for a specific standardized
product in a particular nation.
If the world price for this product is $0.50, this nation will
experience a domestic
Multiple Choice
shortage of 160 units, which it will meet with 160 units of
imports.
shortage of 160 units, which will increase the domestic price to
$1.60.
surplus of 160 units, which it will export.
surplus of 160 units, which...
Need help with this problem
b-e, i did a already. Need help asap. Thanks
Consider an agricultural subsidy provided by the US government. Consider also that milk is one of the products subsidized. If there is NO trade with the rest of the world, the domestic price of milk in the US would be $2.25 per gallon and the equilibrium quantity would be 100 gallons at this price. After trade opens, at the world market price of $1.50 per gallon,...
I
need help with questions 3-5. Thanks!
Consider the case of an industry whose production activity creates substantial pollution in the local rivers, lakes, and groundwater. For example, it is convenient for chemical companies to dump their chemical wastes into nearby lakes and water bodies. This may not impose any cost on the firms. However, the dumping of wastes into the lakes imposes an external cost on the environment and áffects other members of the society. When the domestic firms...
I really need help with the various parts of this one
question.
Consider the Panamanian market for tangerines The following graph shows the domestic demand and domestic supply curves for tangerines in Panama. Suppose Panama's government currently does not allow the international trade of tangerines. Using the black point (X symbol), indicate the equillbrium price of a ton of tangerines and the equilibrium quantity of tangerlines in Panama in the absence of international trade. Dashed drop lines will automatically extend...
please answer it ASAP
IV.Questions (36%) 1. Explain the main idea of H-O theorem. (6%) 2. What is increasing returns to scale? Draw a graph to explain the trade based on increasing returns to scale (10%) 3. Draw a graph to explain the effect of import quota (8%) 4. The production possibility frontiers of nation 1 shown in Fig. nation 1 is labor abundant and export X. PAis the equilibrium price of autarky in nation 1, Pw and Pa are...
Can someone help me answer these questions and explain why? I
haven't had much experience with graphs like these and could really
use some help understanding.
The countries of Swansea and Bristol have domestic supply and
demand curves for wheat as shown in the graphs below (where both
price axes are in the same units). Suppose the world price is
between the domestic no trade prices of the two countries.
2. [7½ points] Consider what happens in Swansea as it...