SAMPLE QUESTIONS ECON 144 FOR EXAM TWO.pdf

SAMPLE QUESTIONS ECON 144 FOR EXAM TWO.pdf - SAMPLE...

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SAMPLE QUESTIONS ECON 144 FOR EXAM 2 Answer the questions below based on our discussion in lecture. This is the demand & supply for some product in some country. 100 80 60 40 20 120 Price Quantity 10 20 30 40 50 60 80 100 120 140 70 90 110 130 10 30 50 70 90 110 130 140 150 160 Assume this country is operating “in autarky”. 1. What is the value of consumer surplus? 2. What is the value of producer surplus? Now assume that international trade opens up and the international price (or “world” price) is $40. 3. What quantity will be imported under free trade? 4. What is the value of consumer surplus under free trade? 5. What is the value of producer surplus under free trade? Now assume the producers in this country are successful getting a $20 per unit tariff placed on this product. 6. What is the quantity that will be imported under the tariff? 7. What is the value of consumer surplus under the tariff? 8. What is the value of producer surplus under the tariff?
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