Use the following figure showing the domestic demand and supply curves for product B in a hypothetical economy to answer the next question. Y P D 0. W Q After trade, at a world price of Pw, the net gain of total economic surplus equals area(s)

Use the following figure showing the domestic demand and supply curves for product B in a hypothetical economy to answer the next question. Y P D 0. W Q After trade, at a world price of Pw, the net gain of total economic surplus equals area(s)

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 55P: Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The demand (d) and supply...

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Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The demand (d) and supply (s) for cameras In Thailand and Japan is described by the following functions: QsT=-5+14P QsJ=-10+14P QdT=60-P QdJ=80-P P is the price measured in a common currency used in both countries, such as the Thai Baht. Compute the equilibrium price (P) and quantities in each country without trade. Now assume that free trade occurs. The free-trade price goes to 56.36 Baht. Who exports and Imports cameras and in what quantities?
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Consider again this same graph: Price 8 7 6 5 4 3 2 0 1 10 20 30 40 Tariff Domestic demand 80 Domestic supply 70 50 60 World price Quantity Now let's say the economy opens to trade which is initially free. Assume we're dealing with a small economy. Calculate consumer surplus, carefully following all numeric instructions.