Question

Suppose the domestic demand for television sets is given by the following demand equation: Qd = 2400- 10P, where P is the price of television sets in dollars. The domestic supply of television sets is: Qs =2P. Finally assume that television sets can be imported at the world price of $160. Suppose the government bans the import of television sets. How much would domestic consumer surplus and domestic producer surplus change as a result of this policy and what would be the deadweight loss? (Show your calculations. Note: A graph is likely to be very helpful in making your calculations.)

Answer #1

Suppose P = 160 then,

Qd = 2400 - 10p

Qd = 2400 - 10(160)

Qd = 2400 - 1600

Qd = 800

Supply Qs = 2p

Qs = 2(160)

Qs = 320

If Government bans the import of television set then in such scenario following will be the circumtances of demand and supply of television sets

Qd = 2400 - 10p and Qs = 2p

then 2400 -10p = 2p

2400 = 12p

p = 200

Demand Qd = 2400 - 10p

Qd = 2400 - 10 (200)

Qd = 2400 - 2000

Qd = 400

Supply Qs = 2p

Qs = 2 (200)

Qs = 400

The demand and supply will be the equal if government bans the import of television set.

Suppose the domestic supply (QS) and demand (QD) for scooters in
China
1- Suppose the domestic supply (QS) and demand (QD) for scooters
in China are given by the following set of equations:
QS = –25 + 10P
QD = 875 – 5P
If China can import scooters from the rest of the world at a per
unit price of $50, how many scooters will be imported, produced and
demanded in China?
a- Quantity Imported = 150, Quantity Produced =...

Suppose that domestic demand in the market for good X is given
by the equation
Qd = 60 - P. And that domestic supply in the market for good X
is given by the equation Qs = 2P
Suppose the world price is $10 and the country allows free
trade.
What is consumer surplus with free trade?
Suppose the government imposes a $5 tariff on imports.
What is the gain to suppliers from this tariff?
What is the gain to...

1) Suppose the domestic supply (QS U.S.) and demand (QDU.S) for
bicycles in the United States is represented by the following set
of equations:
QS U.S. = 2P
QDU.S. = 200 – 2P.
Demand (QD) and supply (QS) in the rest of the world is
represented by the equations:
QS = P
QD =160 – P. Quantities are measured in thousands and price, in
U.S. dollars. After the opening of free trade with the United
States, if the world price...

4. Suppose the domestic supply and demand curves for petroleum
in the U.S. are, Qs = 10P - 300 Qd = 3000 - 20P Let the world trade
price be $50 per barrel. 1) What is the equilibrium quantity of
imports? 2) Suppose a specific tariff of $10 per barrel is imposed.
Calculate Consumer surplus, producer surplus, and tariff revenue.
3) Suppose the government imposes an import quota of 1200 units of
barrels. Find the trading price for petroleum.

Suppose the domestic supply (QSUS) and demand (QDUS) for
bicycles in the United States are given by the following set of
equations:
QSUS = 2P
QDUS = 200 – 2P
Demand (QD) and supply (QS) in the rest of the world are given
by the equations:
QS = P
QD =160 – P
Quantities are measured in thousands and price in U.S.
dollars.
After the opening of free trade with the rest of the world, if
the world price of...

6. Suppose the demand equation can be represented as QD = 1200 –
10p and the Supply equation by Qs= 10p.
a. Solve for the equilibrium price and quantity.
b. Say an excise tax of $5 was placed on the buyers. Solve for
the price buyers pay, price that sellers receive, and the quantity
sold in the market after the tax. Show your work and results
graphically.
c. Find the deadweight loss, consumer surplus, producer surplus,
consumer surplus, and tax...

9.21) Suppose the domestic demand equation for a widget is given
by Q = 80 – 2P and the domestic supply equation is Q = -10 + P.
a) Assume there is free trade and the world price of the widget
is 20 liras. How many units of this widget will be imported?
b) Calculate the change in the consumer supply and producer
supply if the government applies a 5 liras per unit tariff on the
product. What will be...

Suppose in the world market, steel is sold at $5 per ton. The
domestic demand and supply curves of steel in Canada are
Qd =28 – 2p and Qs = -8 + 2p where Q measures
the quantity in tons.
i. Calculate the amount of steel that will be produced and sold
domestically. How much will be imported?
ii. Now suppose Canada completely bans free trade in steel. What
will happen to the price and the quantity produced and sold...

Deadweight Loss] Suppose the market for corn in Banana Republic
is competitive. The domestic supply and demand function of corn is
Qs = 10P and Qd = 100 − 10P, respectively. Both of them measured in
billions of bushels per year.
(a) Calculate the equilibrium price and quantity,
consumer surplus (CS), and producer surplus (PS).
(b) Suppose the government offers a subsidy of $2 per
bushel to the firms. In equilibrium, the consumers are paying $4
per bushel and the...

2. The demand and supply functions for rental accommodation in
Metroland are as follows: Qd = 120 - P Qs = 2P a. Solve for the
competitive equilibrium rental rate (P) and quantity (Q) of rental
units in Metroland. Illustrate this equilibrium in a graph. b. On
your graph, show the regions that represent consumer surplus and
producer surplus. Calculate the value of consumer surplus, producer
surplus, and overall welfare. c. Suppose the City of Metroland
enacts a rent control...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 17 minutes ago

asked 24 minutes ago

asked 51 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago