Table 1: Supply and Demand for Bushels of Soy bean: Mexico
Price ($) | Quantity Supplied | Quantity Demanded |
180 | 81 | 0 |
160 | 72 | 9 |
140 | 63 | 18 |
120 | 54 | 27 |
100 | 45 | 36 |
80 | 36 | 45 |
60 | 27 | 54 |
40 | 18 | 63 |
20 | 9 | 72 |
0 | 0 | 81 |
Assume that Brazil and Canada can supply Soy beans to Mexico at a price of $40 and $60, respectively. In the presence of free trade, which nation exports Soy beans Mexico? How many bushels of Soy beans does Mexico produce, consume, and import? [2 points]
(ii) Assume Mexico levies a 100 percent nondiscriminatory tariff on its Soy beans imports. Which nation exports Soy beans to Mexico? How many bushels of Soy beans will Mexico produce, consume, and imports? [2 points]
(iii) Now suppose Mexico forms a customs union with Canada. Determine the trade creation effect and the trade diversion effect of the customs union. What is the customs union's overall impact on the welfare of Mexico? [8 points]
(iv) Assume instead that Mexico forms a customs union with Brazil. Is this a trade diverting or trade creating customs union? By how much does the customs union increase or decrease the welfare of Mexico? [8 points]
Table 1: Supply and Demand for Bushels of Soy bean: Mexico Price ($) Quantity Supplied...
The table below represents Portugal's daily supply and demand for gloves (in pairs). Portugal is a small nation that is unable to affect the world price of gloves. On Graph paper, draw these supply and demand schedules to answer the questions below. Quantity Supplied Quantity Demanded S Price /Pair 0 0 18 2 16 2 4 14 3 6 12 4 8 10 5 10 8 6 12 6 7 14 4 8. 16 2 9 18 0 A. Assume...