Lecture 24 - 12/9/2009 Announcements Reading for today text...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
12/9/2009 1 ± Reading for today ± text Ch 18 pp. 516-532 or 520-539 for the Global Financial Crisis Edition (484-501 5 th edition) Announcements Exam Announcements ± Exam 3: Monday, December 14, 8-10pm ± Pooled Office Hours: Sunday December 13, 1-4pm AH AUD B ± Exam emphasizes material covered since the last exam: ± Chapters 9-13, 15, 17-18 ± Lectures 16-24 ± Homework 7-11 ± no trade - price where Q D = Q S in domestic market Trade ± market for a good produced domestically and abroad ± domestic demand 31 Price ($ per unit) ± domestic supply S DOMESTIC PS CS Quantity D DOMESTIC P NT Q NT ± no trade - price where Q D = Q S in domestic market ± consumption increases, domestic production decreases Trade 31 Price ($ per unit) S DOMESTIC ± trade - world price where Q D = Q S in world market ± consumers and firms price-takers ± imports (exports) determined by difference between domestic demand and supply ± gain in CS ± loss in domestic PS CS Quantity D DOMESTIC P NT Q NT World P FT Price Q D Q S Imports ± domestic total surplus increases PS ± no trade - price where Q D = Q S in domestic market Trade 31 Price ($ per unit) S DOMESTIC ± trade - world price where Q D = Q S in world market ± consumers and firms price-takers ± imports (exports) determined by difference between domestic demand and supply CS Quantity D DOMESTIC P NT Q NT World P FT Price PS 32 Tariff Price ($ per unit) S DOMESTIC ± tariff - tax on imported good ± price increases by amount of tariff ± equilibrium quantity is lower ± domestic production increases ± imports are lower ± decrease in CS ± increase in dt i P S Imports Quantity D DOMESTIC World Price P FT Q D Q S Imports Q D ´ Q S ´ domestic PS to domestic PS ± transfer from CS to domestic PS Tariff Revenue ± government gets tax revenue DWL ± deadweight loss Tariff World Price (+Tariff)
Background image of page 1

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

View Full DocumentRight Arrow Icon
12/9/2009 2 Tariff Price ($ per unit) S DOMESTIC ± tariff - tax on imported good ±
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/21/2010 for the course ECON 101 taught by Professor Gerson during the Fall '08 term at University of Michigan.

Page1 / 4

Lecture 24 - 12/9/2009 Announcements Reading for today text...

This preview shows document pages 1 - 3. Sign up to view the full document.

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