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Hello I am having trouble with an agriculture economics question, I cannot seem to understand the steps on determining what is the effect on the
Hello I am having trouble with an agriculture economics question, I cannot seem to understand the steps on determining what is the effect on the excess demand curve? Also, what is the effect on the equilibrium international price and trading quantity? I have provided images of the three panel diagram and question below.
All questions are based on the following three panel diagram. A. The U.S. B. International C. The Rest of the World's Motorbike Market Motorbike Market Motorbike Market Price Price Price ($/unit) ($/unit) ($/unit) soob ISus pretrade 5000 World price price with trade 12500 2500 Sex Exports St 2500 Imports Pus 1750 1750 DEX 10 40 70 Quantity bo Quantity 15 45 75 Quantity (thousands) (thousands) (thousands) 5us = U.5. supply Sy = Rest-of-world supply of exports S/ = Rest of world's supply Dus = U.S demand (S, = 5, - DF) D = Rest of world's demand Dm = U.S. demand for imports (Din = Dus - Sus)Consider again the above figure, which shows free trade in motorbikes. Assume that US productivity in producing motorbikes increases. What is the effect on excess demand curve? What is the effect on the equilibrium international price and trading quantityStep by Step Solution
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