2. In contrast to strawberries, Canada is a major exporter of wheat. Canada's demand (QPCDN) and supply (QScdn) of wheat is given respectively by QP cDN = 420 – 30 PcDn Where P is the price per bushel of wheat. and QScdN = 150 + 15 PcdN %3D a) Derive the excess supply curve of wheat for Canada. b) What will be the price at which Canada does not export wheat? c) China is the major importer of Canadian wheat. Its demand (QPH) and supply (Q°x) for wheat is given respectively by QSH = 170 + 5 PH Derive the excess demand curve for wheat in China. ( QPH = 500 – 10 PH and %3D d) What would wheat price be in China in the absence of trade? e) If Canada and China are allowed to trade with one another, what will be the price and the volume of trade? ( f) The trade war has heated up and China imposes a tariff of $2.40 per bushel. Determine the effect of the tariff on: (1) the price of wheat in each country, (2) the quantity of wheat produced and consumed in each country, and (3) the volume of trade. g) Properly label to illustrate the excess demand for China and excess supply curve for Canada on the same graph with free trade and with the import tariff of $2.4 imposed.

2. In contrast to strawberries, Canada is a major exporter of wheat. Canada's demand (QPCDN) and supply (QScdn) of wheat is given respectively by QP cDN = 420 – 30 PcDn Where P is the price per bushel of wheat. and QScdN = 150 + 15 PcdN %3D a) Derive the excess supply curve of wheat for Canada. b) What will be the price at which Canada does not export wheat? c) China is the major importer of Canadian wheat. Its demand (QPH) and supply (Q°x) for wheat is given respectively by QSH = 170 + 5 PH Derive the excess demand curve for wheat in China. ( QPH = 500 – 10 PH and %3D d) What would wheat price be in China in the absence of trade? e) If Canada and China are allowed to trade with one another, what will be the price and the volume of trade? ( f) The trade war has heated up and China imposes a tariff of $2.40 per bushel. Determine the effect of the tariff on: (1) the price of wheat in each country, (2) the quantity of wheat produced and consumed in each country, and (3) the volume of trade. g) Properly label to illustrate the excess demand for China and excess supply curve for Canada on the same graph with free trade and with the import tariff of $2.4 imposed.

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Firms In Competitive Markets

Section: Chapter Questions

Problem 11PA

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