
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
I have no clue on part a. Please answr a) Thanks!

Transcribed Image Text:1. Use the following figure to answer to the questions:
A. The U.S.
Motorbike Market
B. International
Motorbike Market
C. The Rest of the World's
Motorbike Market
Price
($/unit)
Price
Price
($/unit)
($/unit)
Sus
2,000
2,000
U.S. pretrade
price
World price
with trade
Exports
St
F
1,000
B
1,000
1,000
Imports
700
700
Dus
Dm
Df
Quantity
(thousands)
75 Quantity
(thousands)
15
40
65
Quantity
(thousands)
50
25
50
Sus = U.S. supply
Dus = U.S. demand
S = Rest-of-world supply of exports
(Sx = Sf- D;)
Dm = U.S. demand for imports
(Dm = Dus - Sus)
Sf = Rest of world's supply
Df = Rest of world's demand
a. Using the figure above determine the value of the following for the importing country:
-Producer surplus before and after trade
-Consumer surplus before and after trade
-Net changes in producer and consumer surplus
-Net changes in total surplus
b. Using the figure above determine the value of the following for the exporting country:
-Producer surplus before and after trade
-Consumer surplus before and after trade
-Net changes in producer and consumer surplus
-Net changes in total surplus
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VIEW Step 2: 1) Compute the producer surplus before and after trade
VIEW Step 3: 2) Compute the consumer surplus before and after trade
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VIEW Step 5: 4) Compute the net changes in total surplus
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