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2) The US is a big country in the market of lemons and a "net importer." Argentina is a "net exporter" and a big country in that market. Analyze the welfare effect of an export quota by the Argentinian government on the economies of the US and Argentina. What happens with the "term of trade"?
Suppose that in the market for lemons, demand is given by the function Do: QD = 20 – 2P , and supply is given by the function So: QS = (-1) + 3P . Use this information to answer the following questions (round to the nearest hundredth if needed). 1.) What is the equilibrium price in this market? 2.) If a price ceiling of P = 2.8 is imposed on this market, what will the market price be? 3.) How...
Q2) Assume we have two suppliers in the market for lemons, Chris and Alex. Graph their individual supply curve and derive a market supply schedule and a market supply curve. Chris's Schedule Alex's Schedule Price 0.00 0.10 0.20 0.30 0.40 0.50 Price 0.00 0.10 0.20 0.30 0.40 0.50 Quantity Quantity 0 0 6 4 10 15 10
Consider the Bolivian market for lemons. The following graph shows the domestic demand and domestic supply curves for lemons in Bolivia. Suppose Bolivia's government currently does not allow international trade in lemons. Use the black point (plus symbol) to indicate the equilibrium price of a ton of lemons and the equilibrium quantity of lemons in Bolivia in the absence of international trade. Then, use the green triangle (triangle symbol) to shade the area representing consumer surplus in equilibrium. Finally, use...
A single price monopolist is selling purple lemons. Demand for the lemons is P = 6 -0.0020. The marginal cost of production for the firm is MC = 0.6 +0.0010. Calculate the deadweight loss if this firm chooses their optimal quantity. Answer:
A single price monopolist is selling purple lemons. Demand for the lemons is P = 4 - 0.002Q. The marginal cost of production for the firm is MC = 0.4 + 0.001Q. Calculate the deadweight loss if this firm chooses their optimal quantity.
3.23 Good Chips versus Lemons A chip supplier produces 95% good chips and 5% lemons. The good chips fail with probability 0.0001 each day. The lemons fail with probability 0.01 each day. You buy a random chip. Let T be the time until your chip fails. Compute E [T] and Var(T).
Drop down options: lemon coffee neither coffee nor lemons both lemons and coffee Average: /4 Attempts 4. Specialilzation and trade When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFs) for Maldonia and Desonia....
Consider the Bolivian market for lemons.The following graph shows the domestic demand and domestic supply curves for lemons in Bolivia. Suppose Bolivia's government currently does not allow international trade in lemons.Use the black point (plus symbol) to indicate the equilibrium price of a ton of lemons and the equilibrium quantity of lemons in Bolivia in the absence of international trade. Then, use the green triangle (triangle symbol) to shade the area representing consumer surplus in equilibrium. Finally, use the purple...
1. Welfare effects of free trade in an exporting country Consider the Kenyan market for lemons. The following graph shows the domestic demand and domestic supply curves for lemons in Kenya. Suppose Kenya's government currently does not allow international trade in lemons. Use the black point (plus symbol) to indicate the equilibrium price of a ton of lemons and the equilibrium quantity of lemons in Kenya in the absence of international trade. Then, use the green triangle (triangle symbol) to shade the area...