1. The domestic demand (QD) and supply (Qs) for strawberries in Canada are givenrespectively byQD = 800 – 25Pwhere P is the price per box of strawberries.and Qs = -40 + 5Pa) What would be the equilibrium price and quantity if Canada could not trade withany other country for strawberries?b) Calculate producer surplus, consumer surplus and total surplus in the autarkysituation (no trade) for strawberries in Canada?c) Canada is a “small" country in the global market for strawberries since itsproduction or consumption levels do not affect world price. The world price forstrawberries is $20 per box. How much will Canada consume? How much will itproduce domestically and how much will it import (or export)?d) If trade is allowed so that the market price for strawberries is $20/box, calculateproducer surplus, consumer surplus and total surplus for strawberries inCanada?e) Calculate the net change in consumer surplus, producer surplus and total welfareby allowing free trade.f) The imports of strawberries into Canada are from the United States. In responseto tariffs being imposed on Canadian steel by the United States, Canada decidesto impose an import quota of 150 boxes. What will be the new price ofstrawberries in Canada? (Hint use the excess demand equation and equate it to150).g) Use a properly labeled diagram to illustrate the winners and losers from theimposition of an import quota of 150 boxes by Canada.

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1. The domestic demand (QD) and supply (Qs) for strawberries in Canada are given respectively by QD = 800 – 25P where P is the price per box of strawberries. and Qs = -40 + 5P %3D a) What would be the equilibrium price and quantity if Canada could not trade with any other country for strawberries? b) Calculate producer surplus, consumer surplus and total surplus in the autarky situation (no trade) for strawberries in Canada? c) Canada is a “small" country in the global market for strawberries since its production or consumption levels do not affect world price. The world price for strawberries is $20 per box. How much will Canada consume? How much will it produce domestically and how much will it import (or export)?

1. The domestic demand (QD) and supply (Qs) for strawberries in Canada are given respectively by QD = 800 – 25P where P is the price per box of strawberries. and Qs = -40 + 5P %3D a) What would be the equilibrium price and quantity if Canada could not trade with any other country for strawberries? b) Calculate producer surplus, consumer surplus and total surplus in the autarky situation (no trade) for strawberries in Canada? c) Canada is a “small" country in the global market for strawberries since its production or consumption levels do not affect world price. The world price for strawberries is $20 per box. How much will Canada consume? How much will it produce domestically and how much will it import (or export)?

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 6PA

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Please solve 4th,5th,6th Suppose the world price for a good is 100 and the domestic demand-and supply curves are given by the following equations Demand: P=160-Q Supply: P= 10 + 15Q How much is consumed? How much is produced at home? What are the values of consumer and producer surplus? If a tariff of 10 percent is imposed, by how much do consumption and dopest production change? What is the change in consumer and producer surplus? How much revenue does the government earn from tariff?
1. If trade is not allowed, what is the equilibrium price and quantity in this market?2. If trade is allowed, will this country import or export this commodity? Why?3. If trade is allowed, what is the price at which the good is sold, the domestic quantity supplied and demanded, and the quantity imported or exported?4. What area corresponds to consumer surplus if no trade is allowed?5. What area corresponds to consumer surplus if trade is allowed?6. What area corresponds to producer surplus if no trade is allowed?7. What area corresponds to producer surplus if trade is allowed?8. If free trade is allowed, who gains and who loses, the consumers or the producers, and what area corresponds to their gain or loss?9. What area corresponds to the gains from trade?
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Assume that the markets for sugar cane, rum and whiskey are initially in equilibrium(i.e., supply equals demand in each case). Assume further that a good harvest impactsthe world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes in consumption. (b) Discuss the effect on the markets for each of the three products if thegovernment implements a price restriction in the sugar cane market with the aim of protecting the farmers. How will this impact the revenues for sugar growers, rum producers, and whiskey producers?
Domestic Demand Function: p= 100-4Q Domestic Supply Function: p= 40+2.5Q There is an international trade price equal to $15 (pw=15). Although, TheGovernment institutes an import tariff of $9 per unit. Suppose that instead of an import tariff, the government wanted to put an import quota that would make the same change in Producer Surplus as the $9 tarrif A) What is the size of this import Quota that makes this same change in Producer Surplus as the $9 Tariff? B) What is the Deadweight Loss under this Import Quota?
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