Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The demand (d) and supply (s) for cameras in Thailand and Japan is described by the following functions: QdT = 60 – P QsT = –5 + 1/4P QdJ = 80 – P QsJ = –10 + 1/2P P is the price measured in a common currency used in both countries, such as the Thai Baht. Compute the equilibrium price (P) and quantities (Q) in each country without trade. B.Now assume that free trade occurs. The free-trade price goes to 56.36 Baht. Who exports and imports cameras and in what quantities?
Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The demand (d) and supply (s) for cameras in Thailand and Japan is described by the following functions: QdT = 60 – P QsT = –5 + 1/4P QdJ = 80 – P QsJ = –10 + 1/2P P is the price measured in a common currency used in both countries, such as the Thai Baht. Compute the equilibrium price (P) and quantities (Q) in each country without trade. B.Now assume that free trade occurs. The free-trade price goes to 56.36 Baht. Who exports and imports cameras and in what quantities?
Chapter21: International Trade And Finance
Section: Chapter Questions
Problem 16SQ
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Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The
QdT = 60 – P
QsT = –5 + 1/4P
QdJ = 80 – P
QsJ = –10 + 1/2P
P is the price measured in a common currency used in both countries, such as the Thai Baht.
- Compute the
equilibrium price (P) and quantities (Q) in each country without trade.
B.Now assume that free trade occurs. The free-trade price goes to 56.36 Baht. Who exports and imports cameras and in what quantities?
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Author:
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Publisher:
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