Project #44121 - Global Econ

For a particular product, Country A's supply and demand are represented by the following functions:  Qs = – 2 + P; Qd = 52 – P. Suppose Country A is a small country (it takes the world price as given) and the world price is $10 (PW = $10).

Numerical answers are required for the questions. (12 points; 3 points each)

(1) If the government of Country A imposes a 100% tariff on the imports, how much does Country A import?

Your answer:     units (Do NOT include words; Round your answer to one decimal place, unless your answer is an integer.)

 

(2) Moving from free trade to the 100% tariff, by how much does the consumer's surplus change? (Positive number means a gain; a negative number means a loss)

Your answer: $     (Do NOT include "$"; Round your answer to one decimal place, unless your answer is an integer.)

 

(3) Moving from free trade to the 100% tariff, by how much does the producer's surplus change? (Positive number means a gain; a negative number means a loss)

 

Your answer: $ (Do NOT include "$"; Round your answer to one decimal place, unless your answer is an integer.)

(4) What is the deadweight loss for Country A caused by the tariff?

Your answer: $

 (Do NOT include "$"; Round your answer to one decimal place, unless your answer is an integer.)

 

 6.) Which of the following is TRUE about the market economy?

a. Resources are scarce; Competition helps achieve efficient allocation of resources.

b. Resources are scarce; Only the government can allocate the resources efficiently.

c

Resources are scarce; The government must get the upper hand over the "invisible hand" to allocate resources.

d.. Resources are scarce; A society must distribute its resources and products equally among all individuals.

 

 

7

 

Which of the following is NOT true about a perfectly competitive market?

 

a.) At competitive equilibrium, MU=P=MC.

 

 

b. At competitive equilibrium, economic surplus is maximized.

c.) The producer surplus is zero in a perfectly competitive market.

d. The industry supply and demand interest to determine the equilibrium quantity and price

 

Which of the following is NOT true about a monopoly?

a.

Demand is downward sloping and AR>MR.

b. Profit maximization for a monopoly requires that MC=MR<P.

 

c. The quantity and price for a monopoly are determined by the intersection of supply and demand in the market

 

d. At profit maximization for a monopoly, AR>MC.

 

 9.) The Lorenz curve ________; the further away of the actual income distribution curve from the absolute equality curve, the ___the inequality.

 

a.) shows the level of imports and exports in an economy; lower

b. shows the difference between the supply and demand curves at all prices; higher

 

c. shows the levels of income and wealth inequality in an economy; higher

 

Subject Business
Due By (Pacific Time) 10/19/2014 12:00 am
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