(a)
What would be the
(a)
Explanation of Solution
The international trade helps the nation to clear off the excess products produced by the country or to attain the deficit products that the country cannot produce. Thus, in either ways, the trade between the nations takes place. When there is no international trade in the economy, the country must produce at the level where the demand in the economy is equal to the supply in the economy.
At the given price of $100 per container, the quantity demanded is 15 millions, whereas the quantity supplied is 0 million, which means that the country has to import the whole 15 millions from outside. Similarly, at a price point of $200 per container, the quantity demanded is simply 3 million, whereas the quantity supplied is as high as 8 million, which means the country has to export the excess 5 million to the international market. The price point where the domestic demand is equal to domestic supply is at $175 per container. At this point, the quantity supplied equals to the quantity demanded at 6 million, and so there is no need of international trade in the economy. Thus, it is the price per container without international trade, and the quantity brought and sold is 6 million.
Market: The market is a place where the perspective buyers and sellers interact with each other, and exchange of goods and services takes place between the seller and the buyer at a mutually agreed price level.
International trade: The international trade is the exchange of goods and services between the nations or between the international borders.
(b)
At the price point, whether the US or outside world has a
(b)
Explanation of Solution
The international trade helps the nation to clear off the excess products produced by the country or to attain the deficit products that the country cannot produce. Thus, in either ways, the trade between the nations takes place. When there is no international trade in the economy, the country must produce at the level where the demand in the economy is equal to the supply in the economy.
At the given price of $100 per container, the quantity demanded is 15 millions, whereas the quantity supplied is 0 million, which means the country has to import the whole 15 millions from outside. Similarly, at a price point of $150 per container, the quantity demanded is 9 million, whereas the quantity supplied is only 4 million, which means the country has to import the deficit 5 million from the international market. This indicates that the world price is below the US price up to the price point where the quantity demanded is equal to the quantity supplied at $175 per container. Thus, the world price is below the US domestic price up to $175 per container.
Want to see more full solutions like this?
Chapter 7 Solutions
Microeconomics, Student Value Edition
- A semiconductor is a key component in your laptop, cell phone, and iPod. The table provides information about the market for semiconductors in the United States. Producers of semiconductors can get $18 a unit on the world market. a. With no international trade, what would be the price of a semiconductor and how many semiconductors a year would be bought and sold in the United States? b. Does the United States have a comparative advantage in producing semiconductors. c. Draw a graph to illustrate the U.S. supply and demand market for semiconductors. What is the price with free international trade? What is the quantity of semiconductors produced in U.S. and total quantity bought by U.S. people and the quantity exported from other countries? d. Due to loss of competitiveness brought on by appreciation of the exchange rate and the high production costs, U.S. government reduce the export (or limit the supply of domestic producers) by imposing an export quota of 20 billion units per…arrow_forward1. Assume the Philippines is an importer of television in the United States. Consumers buy 800,000televisions per year, half of which are produced domestically, and half are imported. Assume thatthe world price is $150 each television. If there were no televisions sold, a local consumer'swillingness to buy is $400 and the costs to sellers is $100.A. Draw a diagram showing the world price, market supply and market demand for televisionin the local market.B. Show and calculate consumer and producer surplus at the world price. Show all the requiredsolutions.C. Suppose the Philippine government restricts the importation of television by putting a 20percent tariff rate. Suppose this tariff rate leads to a fall of the consumers demand to700,000 televisions each year, and local producers supply 500,000 each year. Illustratethese changes in your diagram above. How many televisions should the country imports?Calculate the change in consumer surplus, producer surplus and total surplus.D.…arrow_forwardTrying to construct a graph that shows U.S. Demand curve for sugar. U.S. Supply curve for sugar. Show world price and U.S. price (show dollar values). Show quantity supplied by U.S. firms and U.S. sugar consumption on graph (show values). Quantity is in pounds. These values are on the attached files. Figure how many pounds of sugar are imported. This will be a value. Show it on the graph. Shade the area(s) of dead-weight loss on the graph (no value needed). Mark the area which is the revenue for foreign sugar producers—figure the dollar value and note it on the graph. Sugar consumption in the U.S. 2009-2019 Pounds(Billions) 2009 21.82 2010 22.48 2011 22.26 2012 22.92 2013 23.58 2014 23.80 2015 23.80 2016 24.20 2017 24.09 2018 24.20 2019 24.25 Sugar production in the U.S. 2009-2019 Pounds(Billions) 2009 15.87 2010 15.65 2011 16.97 2012 17.85 2013 16.97 2014 17.30 2015 17.98…arrow_forward
- A semiconductor is a key component in your laptop, cell phone, and iPod. The table provides information about the market for semiconductors in the United States. Producers of semiconductors can get $18 a unit on the world market. Draw a graph to illustrate the U.S. supply and demand market for semiconductors. What is the price with free international trade? What is the quantity of semiconductors produced in U.S. and total quantity bought by U.S. people and the quantity exported from other countries?arrow_forwardThe table below represents the quantity of rice demanded for selected countries. Quantity of Rice Demanded (millions of metric tons) Price (U.S. dollars per metric ton) Japan Taiwan South Korea Market Total $600 13 7 8 500 14 8.5 10.5 400 15 10 13 300 16 11.5 15.5 200 17 13 18 What is the quantity of rice demanded in the market (in metric tons) if the market price is $300 per metric ton? million metric tons Round your answers to 1 decimal place.arrow_forwardConsider a nation in which you could choose to live in one of two places: 1) By the sea2) Inside the mainland (away from the sea) Let's say that in this economy, people really start preferring being near the sea, more than before. In the market for seaside properties, we'd expect to see _____________; in the market for mainland properties, we'd expect to see _________________. demand fall; quantity demanded rise demand fall; demand rise demand rise; demand fall demand rise; quantity demanded fallarrow_forward
- Discuss the following (make sure to include the examples and its role to country/world): 1. Shortage 2. Surplus 3. Equilibrium 4. Pricearrow_forward[India is the world’s largest consumer of sugar. Assume the world price for sugar is $750 per ton.] [Assume India currently has a tariff of $50 per ton on sugar and imports 7 million tons of sugar. Show this situation in a graph. Label the quantity demanded and the quantity supplied domestically and imports clearly on a graph. Explain your graph in 3-4 sentences. How to draw the graph?arrow_forwardThe table below represents the quantity of rice demanded for selected countries. Quantity of Rice Demanded (millions of metric tons) Price (U.S. dollars per metric ton) Japan Taiwan South Korea Market Total $600 13 7 8 500 14 8.5 10.5 400 15 10 13 300 16 11.5 15.5 200 17 13 18 a. Fill in the market quantity of rice demanded (column “Market”) for each given price. round to the nearest decimalarrow_forward
- How do I figure these out? Please show the steps. Thanks. Refer to a graph that shows a domestic market for COVID19 Vaccine in Korea and U.S. to answer the following questions. Suppose that each country is an open economy and the world price of vaccine is $30. Which country is an importing country? (How do I figure this out?) How much is the amount of import? Which country is an exporting country? How much is the amount of export? 2) Calculate the consumer surplus, producer surplus, total surplus, and gains from trade in Korea. Also, do the same for the U.S. Thanksarrow_forwardChoose one from the following: A worker in Pakistan can produce either 5 units of food per day or 15 yards of cloth. A worker in India can produce either 1 food per day or 5 yards of cloth. Trade between India and the Pakistan would definitely occur where the price of food in terms of cloth (terms of trade) is: a. Pf/ Pc = 7 or 1F = 7C. b. Pf/ Pc = 6 or 1F = 6C c. Pf/ Pc = 2 or 1F = 2C. d. Pf/ Pc = 4 or 1F = 4C. e. None af the above.arrow_forwardALL QUESTIONS APPLY TO GRAPH 28. Suppose IP is the international trade price and this country's government imposes a $3 tariff on imports of this good, what will be the net loss to this economy? 29. Suppose IP is the international trade price and this country's government imposes a $3 tariff on imports of this good, how much revenue will the government collect? 30. Suppose IP is the international trade price and this country's government imposes a 6 unit quota on imports of this good, what will be the net loss to this economY?arrow_forward
- Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning