Handout 5a - Handout 5a Trade Policy and Economic Welfare...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Handout 5a – Trade Policy and Economic Welfare Spring 2007 Page 1 of 2 Consider the market for rice in the United States. U.S. Rice Market 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 0 1 02 03 04 05 06 07 08 0 Price ($/ bushel) Quantity (millions of bushels) U.S. supply U.S. demand 1. Assume that the U.S. rice market is closed to international trade. What would be the U.S. price of rice in the closed economy? How much would be bought? How much would be sold? 2. Assume that the U.S. rice market is closed to international trade. Calculate the consumer surplus and producer surplus in the closed economy. 3. Assume that the U.S. rice market is open to international trade and the world price is $1.50. What would be the U.S. price of rice in the open economy? How much would be bought? How much would be sold?
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Handout 5a – Trade Policy and Economic Welfare
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/18/2008 for the course ECON 100 taught by Professor Kasilwal during the Spring '07 term at CSU Long Beach.

Page1 / 2

Handout 5a - Handout 5a Trade Policy and Economic Welfare...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online