During the 1980s most of the global supply of lysine was produced by a Japanese company named Anjinomoto. Lysine is an essential amino acid that is an important livestock feed component. At this time, the US imported most of this global supply of lysine (more than 30,000 tons) to use in livestock feed at a price of $1.65 per pound. The global market for lysine, however, fundamentally changed in 1991 when US-based Archer Daniels Midland (ADM) began producing lysine; a move that doubled worldwide production capacity. Experts conjectured that the marginal cost of producing lysine was approximately $0.70 per pound. Despite ADM's entry into the lysine market, suppose demand remained constant at Q = 208 – 80P (in millions of pounds). Shortly after ADM began producing lysine, the worldwide price dropped to $0.70. By 1993, however, the price of lysine shot back up to $1.65. Give a plausible explanation for what might have happened in the lysine market. Support your answer with appropriate calculations. [You may use the fact that for a quadratic revenue function R(Q)=aQ²+bQ+c it holds that MR(Q)=2aQ+b.]

The market for pencils has a domestic demand equation P=20−0.5Q�=20−0.5�, and a domestic supply equation  P=5+Q�=5+�, where quantity is measured in thousands. The world supply equation for pencils is PW=10��=10.  The domestic government decides to implement a tariff of $10 per thousand pencils. As a result of the tariff, the new domestic price of pencils is

Assume that the domestic supply curve for crude oil is S(P) = 5P and the domestic demand curve for crude oil is D(P)=500-20P. Further assume that domestic oil refiners face a perfectly elastic supply of oil imports at P = 16. a. Derive the domestic price, the quantity processed by domestic oil refiners, and the amount of imports at the competitive equilibrium. Show the results on a well-labeled graph. Now suppose that the domestic crude oil suppliers face a price ceiling of 8. Further suppose that for each two units of crude oil purchased, a domestic oil refiner gets one entitlement to domestic crude oil. Derive the marginal price of crude oil faced by domestic oil refiners. Add this to the graph in part (a). Derive the effect of regulation on the amount of crude oil processed by domestic oil refiners and the amount of imports. Show this on the graph from part (a). Derive the welfare effect of regulation on U.S. Shade in the welfare losses in the graph for part (a).

Price 22 20 12 10 P = $0.8 Compute the price of suppliers that they are willing to receive for the quantity demanded at the new post- policy price of $20 per bushel (hint: plug the quantity demanded at the new post-policy price of $20 per bushel you found in previous question into the supply function for Qs and figure out the price). P = $11.0 P= $10.4 So P = $12.4 Do 8.8 Quantity

Consider a large country with a domestic demand characterized by the inverse demand function P=1000-Q. Domestic supply is represented by the equation P=400+Q. Finally, the world price of the good is 900. You know that an export tariff pass-through is 10%, meaning that foreign price decreases by 10% value of an export tariff t; more generally, 10% of any change in the domestic price is absorbed by the world market. a) Draw a diagram of a free trade case, label imports, consumer and producer surplus. b) Now you want to introduce export quota restrictions g. Calculate the value of the optimal export quota q, which maximizes domestic welfare. Illustrate CS, PS, QR, and DWL on your graph. Calculate their numerical values.

I) The demand for petroleum is given by QD=85 − 0.4? where Q Dis the quantity demanded in thousands of barrels per day and P is the price per barrel in dollars. The supply of petroleum is given by QS=55+0.6?. Calculate the equilibrium price and quantity in this market.   II) In the context of the problem in part (i), calculate the demand and supply for petroleum if the market price is $15 per barrel. What problem exists in the economy?

Suppose goods X and Y are complimentary products.  Which of the following are correct with respect to the competitive market model of supply and demand? (check all that apply) an increase in the price of good Y will cause an increase in demand for good X and reduce the quantity demanded for good Y an increase in the price of good Y will cause a decrease in demand for good X and reduce the quantity demanded for good Y a decrease in the price of good X will increase the quantity demanded for good X and cause a decrease in demand for good Y a decrease in the price of good X will increase the quantity demanded for good X and cause an increase in demand for good Y

A federal regulation that required that all beef consumed in the US must be grown and processed in the US is likely to: Drive up the price of beef in the US Increase beef consumption in the US Decrease consumption of chicken in the US (assuming chicken is a substitute for beef in the US) Increase international trade in beef products

Answer the c and d options

The government of canada recently signed a new preferential trade agreement and has agreed to pay subsidies to poultry farmers to compensate for increased competition they may face from imports. You are employed as an analyst. In order to determine the dollar value of compensation you are required to estimate how the Canadian price of poultry and the quantity of imported poultry will change as a result of this new trade agreement. Canada is a small importing country in the world market for poultry. Provided is the following information about the Canadian poultry market: 1.The world price of poultry is $5 2.The Canadian poultry market is currently (before new trade agreement) protected by a tariff rate quota (TRQ) of the following format: -an in-quota tariff is $1/unit -the import quota volume is 100 units -the over-quota tariff is $10/unit 3.An excess demand (ED) for imports function for poultry has been estimated as P = 28 - 0.14Q   a)Draw the diagram for imports in this market, and…