Principles of Economics (MindTap Course List)
8th Edition
ISBN: 9781305585126
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 9, Problem 3PA
Subpart (a):
To determine
The impact of developing the production in one important country.
Subpart (b):
To determine
The impact of developing the production in one important country.
Sub part(c):
To determine
The impact of developing the production in one important country.
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When China’s clothing industry expands, the increase in world supply lowers the world price of clothing.
a. Draw an appropriate diagram to analyze how this change in price affects consumer surplus, producer surplus, and total surplus in a nation that imports clothing, such as the United States.
b. Now draw an appropriate diagram to show how this change in price affects consumer surplus, producer surplus, and total surplus in a nation that exports clothing, such as the Dominican Republic.
c. Compare your answers to parts (a) and (b). What are the similarities and what are the differences? Which country should be concerned about the expansion of the Chinese textile industry? Which country should be applauding it?
When China’s clothing industry expands, the increase in the world supply lowers the world price of clothing.
Draw an appropriate diagram to analyze how this change in price affects consumer surplus, producer surplus, and total surplus in a nation that imports clothing, such as the United States.
Now, draw an appropriate diagram to show how this change in price affects consumer surplus, producer surplus, and total surplus in a nation that exports clothing, such as the Dominican Republic.
Compare your answers (a) and (b). what are the similarities, and what are the differences? Which country should be concerned about the expansion of the Chinese textile industry? Which country should be applauding it? Explain.
. When China’s clothing industry expands, the increasein world supply lowers the world price of clothing.a. Draw an appropriate diagram to analyze howthis change in price affects consumer surplus,producer surplus, and total surplus in a nationthat imports clothing, such as the United States.b. Now draw an appropriate diagram to show howthis change in price affects consumer surplus,producer surplus, and total surplus in a nationthat exports clothing, such as the DominicanRepublic.c. Compare your answers to parts (a) and (b). Whatare the similarities and what are the differences?Which country should be concerned about theexpansion of the Chinese textile industry? Whichcountry should be applauding it? Explain
Chapter 9 Solutions
Principles of Economics (MindTap Course List)
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