BUS
sample_midterm.pdf

Data from the wto a use this information to calculate

• Test Prep
• 3

This preview shows pages 2–3. Sign up to view the full content.

billion of such products. (Data from the WTO.) a. Use this information to calculate the index of intra-industry trade. (6 pts) b. What does this index tell us in this case? (6 pts)

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

500+ 50Q When there is free trade, the price in the U.S. is equal to the world price (P w ) of \$1800. The U.S. consumption of glasses is Q T = 70 and the U.S. domestic production is Q D =26. T D 12. See box, chart and below. P (\$ per scooter) 6000 D S r The questions below relate to the following situation: Assume that the graph at left (not drawn to scale) shows the market for electric scooters in the U.S. The domestic demand curve (D) has the following equation: P = 6000 – 60Q The domestic supply curve (S) has the equation: P = P t = 2700 P w = 1800 x 500 s k m v w If the U.S. government imposes a tariff of \$900 per scooter, the price rises to P t = \$2700. The U.S. consumption of scooters Q + = 55 and the U.S. domestic production is Q + = 44. 0 Q D Q D + Q T + Q T Q of scooters 26 44 55 70 Use the information above to answer the following questions (read them carefully and show your work): a. Calculate the values of Q and P where the demand and supply curves intersect. [Not shown on graph.] Indicate units of measurement for your answers. (10 pts) b. What was the market share of the importers at the world price (\$1800) prior to the imposition of the tariff? Indicate units of measurement. (6 pts) c. By how much did the tariff reduce the U.S. consumer surplus? (Indicate units of measurement.) (10 pts) d. What happened to national welfare in the U.S. as a result of the tariff? (Be as specific and as complete as possible, including units of measurement.) (6 pts) 5
This is the end of the preview. Sign up to access the rest of the document.
• Fall '08
• Staff

{[ snackBarMessage ]}

What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern