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I just need help with 1a and 1b Use the following information on the supply and demand for oll in the hypothetical country Economica to
I just need help with 1a and 1b
Use the following information on the supply and demand for oll in the hypothetical country Economica to answer the questions below. Assume that the demand and supply curves are linear. It is possible to answer question 1 without drawing a graph, but a graph will likely be helpful. Question 2 require2 a graph. You may use the template at the end of the problem (the top portion will be more useful for problem 2 and the bottom graph for problem 1) or draw your own graph. 1. Assume that Economica is a small country and that the world price of oil is $40 per barrel. a. Calculate producer and consumer surplus under autarchy (no trade). b. Calculate producer and consumer surplus assuming free trade. c. Calculate the gains from trade. Now assume that-Economica enacts a \$20 tariff on oil. Calculate the effect of the tariff on each of the following: d. The price of oil in Economica e. Producer surplus (calculate the change in producer surplus from before the tariff to after the tariff) f. Consumer surplus g. Government tariff revenue h. Consumption distortion loss i. Production distortion loss j. Total welfare (surplus) k. Oil imports Use the following information on the supply and demand for oll in the hypothetical country Economica to answer the questions below. Assume that the demand and supply curves are linear. It is possible to answer question 1 without drawing a graph, but a graph will likely be helpful. Question 2 require2 a graph. You may use the template at the end of the problem (the top portion will be more useful for problem 2 and the bottom graph for problem 1) or draw your own graph. 1. Assume that Economica is a small country and that the world price of oil is $40 per barrel. a. Calculate producer and consumer surplus under autarchy (no trade). b. Calculate producer and consumer surplus assuming free trade. c. Calculate the gains from trade. Now assume that-Economica enacts a \$20 tariff on oil. Calculate the effect of the tariff on each of the following: d. The price of oil in Economica e. Producer surplus (calculate the change in producer surplus from before the tariff to after the tariff) f. Consumer surplus g. Government tariff revenue h. Consumption distortion loss i. Production distortion loss j. Total welfare (surplus) k. Oil importsStep by Step Solution
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