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2. Consider the following demand and supply functions for wine for Italy and Spain. D' 180 – 20P' DS 80 – 10PS SI -20 + 10P! -20 + 20PS a) Calulate (i) the equilibrium world price when both countries are OPEN to trade; (ii) quantity exported and imported by each country; (iii) The TOTAL welfare of the importing country.Give exact numbers. b) The importing country introduces a tariff of €2. Calculate (i) the new price in the importing country; (ii) the new free trade price; (iii) the Total welfare of the importing country; (iv) the effect on the welfare of the importing country in comparison with your previous answer. Give exact numbers.

2. Consider the following demand and supply functions for wine for Italy and Spain. D' 180 – 20P' DS 80 – 10PS SI -20 + 10P! -20 + 20PS a) Calulate (i) the equilibrium world price when both countries are OPEN to trade; (ii) quantity exported and imported by each country; (iii) The TOTAL welfare of the importing country.Give exact numbers. b) The importing country introduces a tariff of €2. Calculate (i) the new price in the importing country; (ii) the new free trade price; (iii) the Total welfare of the importing country; (iv) the effect on the welfare of the importing country in comparison with your previous answer. Give exact numbers.

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter34: Globalization And Protectionism
Section: Chapter Questions
Problem 57P: The country of Pepperland exports steel to the Land of Submarines. Information for the quantity...
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2. Consider the following demand and supply functions for wine for Italy and Spain. D' 180 – 20P' DS 80 – 10PS SI -20 + 10P! -20 + 20PS a) Calulate (i) the equilibrium world price when both countries are OPEN to trade; (ii) quantity exported and imported by each country; (iii) The TOTAL welfare of the importing country.Give exact numbers. b) The importing country introduces a tariff of €2. Calculate (i) the new price in the importing country; (ii) the new free trade price; (iii) the Total welfare of the importing country; (iv) the effect on the welfare of the importing country in comparison with your previous answer. Give exact numbers.
Transcribed Image Text:2. Consider the following demand and supply functions for wine for Italy and Spain. D' 180 – 20P' DS 80 – 10PS SI -20 + 10P! -20 + 20PS a) Calulate (i) the equilibrium world price when both countries are OPEN to trade; (ii) quantity exported and imported by each country; (iii) The TOTAL welfare of the importing country.Give exact numbers. b) The importing country introduces a tariff of €2. Calculate (i) the new price in the importing country; (ii) the new free trade price; (iii) the Total welfare of the importing country; (iv) the effect on the welfare of the importing country in comparison with your previous answer. Give exact numbers.
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