Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184890
Author: PINDYCK
Publisher: PEARSON
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Chapter 9, Problem 8E
(a)
To determine
Identify the domestic price of metal after imposing tariff.
(b)
To determine
Identify the domestic price of metal after the elimination of tariff.
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The market for rice in an East Asian country has demand and supply given by QD = 28 β 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 β 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
Let us consider the case of Good X in Malaysia. The demand and supply functions for Good X in Malaysia are
Demand function:Β QD=361β2P
Supply function:Β QS=23+P
Β
Find out the number of imports atΒ Pw=70 (Please give your answers in two decimal places. )
If the import quota was 80 units what will be the new price in the Malaysian market? (Please give your answers in two decimal places.)
How many Good X will be produced domestically after the quota has been implemented? (Please give your answers in two decimal places.)
How many Good X will be consumed by domestic consumers after the quota has been implemented? (Please give your answers in two decimal places.)
What will be the import after implementing an import quota of 80 units (Please give your answers in two decimal places.)
What is the percentage change in imports after the imposition of the import quota? (Please give your answers in two decimal places, Multiply by 100 to convert into a percentage (if you get 0.40 then submit 40 in theβ¦
Country C imports 80,000 metric tons of steel from Country U and produces domestically 80,000 metric tons per year. The world price of steel is $500 per metric ton. Assuming linear schedules, research analysts estimated the price elasticity of domestic supply to be 0.50 and the price elasticity of domestic demand to be -0.25 in the current market equilibrium. Country C imposes an import duty of $150 per metric ton that caused the world price to fall by 10%.
(a) Summarise and analyse the quantity of steel produced, consumed and imported in Country C. Analyse and discuss the welfare gain from trade in Country C. Show your answers of the steel market with a proper diagram.
(b) Analyse the effects of the consumer surplus, producer surplus, government revenue and deadweight loss in the Country C steel market with the tariff. What are the terms of trade of the Country C steel market after the tariff was imposed? Explain the welfare effects of both countries.
Chapter 9 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
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