assignment4 - Economics 181 International Trade Assignment...

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Economics 181 International Trade Assignment #4 Due Date: Beginning of class November 21 1. The nation of Bermuda is &small± and assumed to be unable to affect world prices. It imports strawberries at the price of 10 dollars per box. The Domestic Supply and Domestic Demand curves for boxes are: S = 60 + 20P D = 1160 ² 15P (a) Assume Bermuda is completely open to trade. What is the equilibrium price and quantity consumed? How much is produced domestically, and how much is imported? (b) Now consider the effect of an import quota of 400 boxes. What happens to the price of strawberries and quantity consumed? How much is produced domestically, and how much is imported? (c) Who wins and who loses? Discuss consumers, domestic producers, and importers (Be sure to compute the change in their welfare). 2. Assume California³s supply and demand for beef is: Dc = 800 ² 10P Sc = 200 + 30P (a) Derive and graph California³s import demand schedule. If California³s agricultural department outlawed purchasing out of state beef to prevent the slaughter of unhappy cows, what would the
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