EBK MICROECONOMICS
5th Edition
ISBN: 9781118883228
Author: David
Publisher: YUZU
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Chapter 1, Problem 1.19P
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Change in
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The market for rice in an East Asian country has demand and supply given by QD = 28 – 4P and QS = -12 + 6P, where quantities denote millions of bushels per day. a. If the domestic market is perfectly competitive, find the equilibrium price and quantity of rice. Compute the triangular areas of consumer surplus and producer surplus. b. Now suppose that there are no trade barriers and the world price of rice is $3. Confirm that the country will import rice. Find QD, QS, and the level of imports, QD – QS. Show that the country is better off than in part (a), by again computing consumer surplus and producer surplus. c. The government authority believes strongly in
China’s entry into the World Trade Organization (WTO) in 2001 created more competition between local and foreign firms, and also provided China greater access to the market for exports. This was particularly true in the market for rubber since, at the time, China was the world’s second largest consumer of rubber (China is now the world’s largest consumer of rubber). Shortly after joining the WTO, China eliminated its import quota on rubber. What impact do you think the import quota reduction likely had on the price of rubber and the quantity of rubber exchanged in China? What implications do you think the elimination of the quota on rubber had on China’s social welfare?
The supply curve for sugar is given as Supply: Qs = 1750 + 24P and demand for sugar is given as Demand: Ds = 3270 – 26P; where P is price in SR per kg. What will be the equilibrium price and equilibrium quantity in the free market?
Chapter 1 Solutions
EBK MICROECONOMICS
Ch. 1 - Prob. 1RECh. 1 - Prob. 2RECh. 1 - Prob. 3RECh. 1 - Prob. 4RECh. 1 - Prob. 5RECh. 1 - Prob. 6RECh. 1 - Prob. 7RECh. 1 - Prob. 1.1PCh. 1 - Prob. 1.2PCh. 1 - Prob. 1.3P
Ch. 1 - Prob. 1.4PCh. 1 - Prob. 1.5PCh. 1 - Prob. 1.6PCh. 1 - Prob. 1.7PCh. 1 - Prob. 1.8PCh. 1 - Prob. 1.9PCh. 1 - Prob. 1.10PCh. 1 - Prob. 1.11PCh. 1 - Prob. 1.12PCh. 1 - Prob. 1.13PCh. 1 - Prob. 1.14PCh. 1 - Prob. 1.15PCh. 1 - Prob. 1.16PCh. 1 - Prob. 1.17PCh. 1 - Prob. 1.18PCh. 1 - Prob. 1.19PCh. 1 - Prob. 1.20PCh. 1 - Prob. 1.21P
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