ECON 1000 Lecture Notes - Lecture 3: Gross Domestic Product, Economic Surplus, Market Power

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pinkbuffalo857

17 Feb 2016

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The before-trade domestic price of tomatoes in canada is per tonne. The world price of tomatoes is per tonne. Canada is a price taker in the tomatoes market. If trade in tomatoes is allowed, what will be the price of tomatoes in canada? a. b. c. d. If trade in tomatoes is allowed, how will canadian consumers. If trade in tomatoes is allowed, how would consumer surplus and. If trade in tomatoes is allowed, what will happen to the price of. 11) tomatoes in canada? a. b. c. d. It makes domestic sellers better off and domestic buyers worse off. It makes domestic sellers worse off and domestic buyers worse off. It makes domestic sellers better off and domestic buyers better off. It makes domestic sellers worse off and domestic buyers better off: denmark is an importer of computer chips and is also a price taker in the chip market.

Related Questions

Trade raises the economic well-being of a nation in the sense that

1. the gains of the winners exceed the losses of the losers.

2. everyone in an economy gains from trade.

3. since countries can choose what products to trade, they will pick those products that are most beneficial to society.

4. the nation joins the international community when it begins to engage in trade.

magentabear448

2) Kenya and Uzbekistan each produce textiles and steel using labor as their only resource. Each country has 1,000 hours of labor. In Kenya, 1 hour produces 1 ream of textiles and it takes 2 hours to produce 1 ton of steel. In Uzbekistan, 1 hour produces 1 ream of textiles and it takes 3 hours to produce 1 ton of steel. When they do not trade with each other, Kenya consumes 750 reams of textiles and 125 tons of steel, Uzbekistan consumes 500 reams of textiles and 166.67 tons of steel.

a) How much of each product does each country produce in 1 hour?

b) Which country has the absolute advantage in textile production?

c) What is the price of steel in Uzbekistan before the two countries begin to trade with each other?

d) In order for Kenya to gain from trade, what must the price of textiles be less than?

e) At what price will Uzbekistan's gains from the trade of textiles be the largest?

f) What is the opportunity cost of a ton of steel in Kenya?

amaranthsheep69

The equation for the demand curve is D = 100 - P. That means that the intercept on the price axis is 100, and the intercept on the quantity axis is also 100. The slope of the demand curve is -1. The equation for the supply curve is S = 9*P. That means that the supply curve begins at the origin, and increases with a slope of 9. For example, if the price is $1, the quantity supplied is 9. If the price is $20, the quantity supplied is 180. If you draw these curves you will notice that the intersection of supply and demand occurs at a price of $10 and a quantity of 90. That is the market equilibrium. We will call it the autarkic equilibrium in this market.

A. What is the consumer surplus?

B. What is the producer surplus

C. Using the same information as in problems A and B, now also assume that the country can trade this product at a world price of $20. Will the country be an exporter or an importer of the product?

D. Continuing with the information in the previous problem, at a price of $20, what is the quantity demanded? Plug the price into the demand formula in problem A

E. What is the new consumer surplus when the country begins trading at a price of $20?

F. What is the new producer surplus when the country begins trading at a price of $20?

G. What is the dollar value of the gains from trade?

raspberrybear41

ECON 1000 Lecture Notes - Lecture 3: Gross Domestic Product, Economic Surplus, Market Power

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