Problem_Set4

# Problem_Set4 - Below are given the domestic demand and...

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

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

View Full Document
3. (small, open economy)
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Below are given the domestic demand and supply for cut (long stem) roses. demand supply price quantity price quantity \$4.50 25,000 \$4.00 50,000 \$0.25 \$3.50 100,000 \$0.50 \$3.00 150,000 \$1.00 50,000 \$2.50 200,000 \$1.50 100,000 \$2.00 250,000 \$2.00 150,000 \$1.50 300,000 \$2.50 200,000 \$1.00 400,000 \$3.00 250,000 \$0.50 500,000 \$3.50 300,000 \$0.25 600,000 \$4.00 350,000 \$4.50 400,000 a. Find the autarkic (i.e. no trade) equilibrium price and quantity. b. Suppose that the world price is \$1. Will the country import or export roses? How much? c. Draw a diagram. d. Suppose that a tariff of \$1 per dozen is imposed. Find the new equilibrium price, quantity supplied, quantity demanded, imports and tariff revenue. e. Draw a diagram. Show the revenue and the deadweight burden. f. Suppose that the world price is \$4. Will the country import or export roses? How much? g. Draw a diagram. Show the expenditure and the deadweight burden....
View Full Document

## This note was uploaded on 03/30/2008 for the course ECON 201 taught by Professor C.liedholm during the Spring '07 term at Michigan State University.

### Page1 / 2

Problem_Set4 - Below are given the domestic demand and...

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

View Full Document
Ask a homework question - tutors are online