The nation of Bermuda is “small” and assumed to be unable to affect world prices. It imports strawberries at the price of 10 dollars per box. The Domestic Supply and Domestic Demand curves for boxes are: S = 60 + 20P D = 1160 − 15P (a) if the import quota is 400 boxes then what is new equilibrium price.
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The nation of Bermuda is “small” and assumed to be unable to affect world prices. It imports
strawberries at the price of 10 dollars per box. The Domestic Supply and Domestic
for boxes are:
S = 60 + 20P
D = 1160 − 15P
(a) if the import quota is 400 boxes then what is new
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- Suppose you have the following for white t-shirts market:Market demand is P=125-(3/8)QMarket supply is P=5+(1/8)Q. Suppose it is now possible to obtain white t-shirts from the rest of the world at $15 per item at anygiven quantity. In other words, there is now a global supply that is horizontal at $15.a. Obviously the world price and domestic price will now be $15. Calculate the quantityproduced and demanded domestically. Calculate the difference as imports from the rest of theworld.b. Calculate the CS (Consumer Surplus) and PS (Producer Surplus) under free trade. Who gainswith free trade? Who loses?Hint: Use graphs first.Suppose that a country implements a $20 tariff. Before the tariff, the country was importing 900 units of the good. After the tariff, the country imported 850 units of the good. What is the deadweight loss from the tariff? Assume that domestic supply and demand are linear.The nation of Bermuda is “small” and assumed to be unable to affect world prices. It importsstrawberries at the price of 10 dollars per box. The Domestic Supply and Domestic Demand curvesfor boxes are:S = 60 + 20PD = 1160 − 15P(a) Assume Bermuda is Completely open to trade. What is the equilibrium price.
