Consider a small economy with a demand for a good that is q=100-4p and a supply that is q=-10+p. The world price of this good is 20. The autarky equilibrium price and quantity are: Assume no trade. Total surplus is: Assume free trade. The new price, quantity supply and quantity demanded
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Consider a small economy with a demand for a good that is q=100-4p and a supply that is q=-10+p. The world
The autarky
Assume no trade. Total surplus is:
Assume free trade. The new price, quantity supply and quantity demanded are
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- Suppose a domestic market in a country is perfectly competitive. The domestic market is small and cannot influence the international price. Assume the country imports from the international market. Which of the following is correct about the effect of an import quota? Group of answer choices A) Increases domestic producer surplus B) Increases import quantity C) Increases total surplus in the domestic market D) Decreases total domestic quantity supplied E) None of the aboveSuppose a domestic market in a country is perfectly competitive. The domestic market is small and cannot influence the international price. Assume the country exports to the international market. Which of the following is correct about the effect of a tax per unit purchased in the country? a. The domestic producers supply more to the domestic market b. Increases export quantity c. Increases total quantity supplied d. Decreases total quantity supplied e.None of the aboveQuestion 21Based on the given PPF for a country, which of the following is an example of a point that is unattainable? 6 units of good X and 30 units of good Y. 0 units of good X and 30 units of good Y. 2 units of good X and 18 units of good Y. 6 units of good X and 18 units of good Y. Question 23The "law of demand" states that: Other thing remaining the same, the higher the price of a good, the smaller is the quantity demanded. the higher consumers' incomes, the greater is the demand. the higher the price of a good, the higher is the quantity demanded. the higher the price of a good, the lower is the demand for this good. Question 24The price elasticity of demand for oranges ___ change if the units of the quantity were changed from pounds to kilograms and ___ change if the units of the price were changed from dollars to cents. D) would not; would not C) would not; would A) would; would B) would; would not Question 25 Given this market for roses, what are the equilibrium price…
- In an effort to protect its domestic pear production, the Kingdom of Genovia decides to place an import tariff on pears. Which of the following correctly explains the tariff’s effect on domestic demand? Choice 1 of 4:The tariff will raise domestic prices and decrease the quantity demanded.Choice 2 of 4:The tariff will raise domestic prices and cause the demand curve to shift left.Choice 3 of 4:Tariffs do not impact the domestic quantity demanded.Choice 4 of 4:The tariff will lower domestic prices and increase the quantity demanded.Without trade, consumer surplus isIn an attempt to support beef farmers, the Japanese government raised the minimum price for beef in 2008. If the market equilibrium price was below the government’s minimum price, then the government’s minimum price is an example of a Binding price floor. Non-binding price floor. Binding price ceiling. Non-binding price ceiling. Classify the below scenarios as efficient, inefficient, or impossible: The Japanese government sets a minimum price for beef, resulting in a deviation from the market equilibrium. Canada and Japan specialize in the production of goods according to their comparative advantages and then trade. Canada’s overall production fell in 2020 due to widespread unemployment caused by the pandemic. ] The price of certain fresh fruits and vegetables in both Canada and Japan rose in March of last year as the pandemic made international trade in fresh fruits and vegetables difficult (assume no price controls).
- Question 16 Refer the to graph below to answer Questions 16-18 In the graph above, if the minimum price is set at P1, what area(s) represent the producer surplus after the implementation of this policy? Question 16 options: a) Areas B+C+E+F b) Areas B+E c) Areas E+F d) Area E e) Area B Question 17 In the graph above, if the minimum price is set at P1, what will limit the quantity of the good that is sold? Question 17 options: a) Demand b) Supply c) A government quota d) Consumer surplus e) Producer surplus Question 18 In the graph above, if the minimum price is set at P1, what area(s)…A price floor that interferes with the market equilibrium will be price set below the market equilibrium True False A price ceiling that interferes with the market equilibrium will be price set below the market equilibrium True False On a production possibility curve a point on the graph that indicates inefficiency and underutilization, will be a point on the curve True FalseWhich of the following is true of any market? a. The interaction of demand and supply determines the price and quantity in that market. b. There must be a supply of the item but not necessarily a demand for the item. c. Demand and supply are always equal for an item. d. There must be a demand for the item but not necessarily a supply of the item. e. The market will always be in equilibrium
- Demand and supply.2. Use the process of comparative statics to analyse the following changes in market conditions for the pizza market in a capital city (Hint: You are analysing general market condition assuming a competitive market). a) There is a general increase in consumer income. [assume pizza is a normal good] b) There is a fall in the price pastry ingredients used to make pizza by 25%.Elasticity.3. You are in the food truck industry in a capital city. You discover a new way to organise the preparation of ingredients that decreases the cost and increases the number of serves per day. You believe this will enable the business to reduce the price of a serve of curry from $20 to $15. It is estimated that the price elasticity of demand for food truck cuisine is 1.9. What will happen to total revenue if the price of a curry per serve is decreased? Should you decrease the price of the currySuppose that you decide to start a new business of making children’s ready-made garments. Make a (Hypothetical) linear supply schedule with 7 different price points and corresponding quantity supplied for your business. Make a graph showing equilibrium, shortage and surplus in the ready-made garments market. Give interpretation of this graph. Suppose cheap ready-made garments are imported from China. Draw a graph to show changes in equilibrium price and quantity for the Pakistani ready-made garments market. Give interpretation of this graph. Suppose that to boost the local industry, the Pakistani government gives subsidy on electricity prices. Draw a graph to show changes in equilibrium price and quantity. Give interpretation of this graph. Suppose that cheap cloth is imported from China for production of readymade garments and at the same time tourism in Pakistan increases bringing many more buyers of ready-made garments in the market. What will be impact on equilibrium price and…If the equilibrium quantity in a competitive market is 25, but society (by some means) buys and sells a total of 41 units, then an inefficiency is caused by the exchange of 16 units.True or False
