Suppose that the world price for shoes ( which would be the price if Country L trades with the rest of the world) is equal to $ 75. What is the CHANGE in total surplus to Country L ( after trade) on Unit 85,000 ( i.e., find the difference between the total surplus if Country L does trade and the total surplus if Country L does not trade)?
Suppose that the world price for shoes ( which would be the price if Country L trades with the rest of the world) is equal to $ 75. What is the CHANGE in total surplus to Country L ( after trade) on Unit 85,000 ( i.e., find the difference between the total surplus if Country L does trade and the total surplus if Country L does not trade)?
Chapter4: Demand, Supply, And Market Equilibrium
Section: Chapter Questions
Problem 7P
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Question
You are given the following points on the Supply and Demand Curves for shoes within Country L ( i.e., D for L’s consumers , S for L’s suppliers):
Price Qty. Demanded Qty. Supplied
$ 90 60,000 180,000
$ 75 75,000 150,000
$ 70 80,000 140,000
$ 65 85,000 130,000
$ 62.50 87,500 125,000
$ 60 90,000 120,000
$ 50 100,000 100,000
$ 45 105,000 90,000
$ 42.50 107,500 85,000
$ 37.50 112,500 75,000
$ 30 120,000 60,000
$ 25 125,000 50,000
Suppose that the world price for shoes ( which would be the price if Country L trades with the rest of the world) is equal to $ 75.
What is the CHANGE in total surplus to Country L ( after trade) on Unit 85,000 ( i.e., find the difference between the total surplus if Country L does trade and the total surplus if Country L does not trade)?
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