AEM%202300%20Section%204 - AEM 2300/ECON 2300 Section #4...

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AEM 2300/ECON 2300 Section #4 February 21/ 22, 2011 1) Given below are the domestic supply and demand schedules (under autarky) for televisions in Portugal. Price of TV Quantity Demanded Quantity Supplied 350 0 700 300 150 600 250 300 500 200 450 400 150 600 300 100 750 200 50 900 100 0 1050 0 a) Plot Portugal’s supply and demand curves on a graph, indicating equilibrium price and quantity b) What is the equation for the demand curve? c) What is the equation for the supply curve? d) What is the equilibrium price and quantity? e) On the graph for (a), clearly label consumer surplus and then calculate consumer surplus. f) On the same graph, clear label producer surplus and calculate producer surplus.
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2) Assume Portugal is a small country that is unable to influence the international price. Under free trade, Portugal can now import televisions for $100. a) Redraw your graph and show the new free trade situation. b) What is the free-trade equilibrium price?
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This note was uploaded on 03/27/2011 for the course AEM 2300 taught by Professor Lee,d.r. during the Spring '06 term at Cornell University (Engineering School).

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AEM%202300%20Section%204 - AEM 2300/ECON 2300 Section #4...

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