Please answer the attached questions.
C A blackboard.gwu.edu/bbcswebdav/pid-9899748-dt-content-rid-69871999_2/courses/73834_202001/Micro%20Assignment%207%282%29.pdf Q OJO Yanbing Min 5/6 Part II. Problem-solving questions Refer to the following graph for questions 16-18. For a particular product, Country A's supply and demand are represented by the following functions: Q. = 2 + P; Qa = 52 -P Suppose Country A is a small country (which cannot influence the world price). In free trade, Country C can export the product for $10 (Pc = $10) and Country B for $15 (PB = $15). (Round your answer to two decimal places unless it is an integer. Please do NOT include words like "units" or "$" in your answer.) Trade creation and trade diversion: welfare analysis P Country A (1+t)Pc $20 PB $15 PC $10 16. Situation 1 - free trade: If there is free trade, where does Country A import (from Country Bor Country C)? How much does it import? Answers: Country A imports from Country (B/C) with the amount 17. Situation 2 - non-discriminative tariff: If Country A imposes a 100% tariff on imports from all countries, where does Country A import? At what price? How much to import? + Answers: Country A imports from Country (B/C) at the price level with the amount 5 Type here to search O me a W 8:57 PM 2/29/2020 C A blackboard.gwu.edu/bbcswebdav/pid-9899748-dt-content-rid-69871999_2/courses/73834_202001/Micro%20Assignment%207%282%29.pdf Q OJO Yanbing Min 6/6 18. Situation 3- customs union: Suppose Country A joins Country B for a customs union - allowing free trade with member countries but still keeping 100% tariff on imports from non-member countries. Where does Country A import? At what price? How much? Moving from Situation 2 to Situation 3 does Country A gain or lose welfare as revenue? measured by changes in consumer surplus, producer surplus, and government tariff Answer. Country A imports from Country (B/C) at the price level_ with the amount Answer. Country A will_ welfare. (gain/lose) Refer to the following information for questions 19-20. (Problems based on the H-O model) Country A possesses 8000 units of labor (1) and 8000 units of capital (K), while Country B possesses 6000 units of L and 7200 units of K. At a given wage/ rental ratio, both countries use 6 units of L. and 12 units of K to produce a specific amount of Commodity X (produced only in Industry X), and 9 units of L. and 27 units of K to produce a specific amount of Commodity Y (produced only in Industry Y). Assume all the assumptions of the H-O theory hold. + 19. Country A is abundant in_ . (Labor/capital) Industry X is intensive. (Labor/capital) 20. Country B has comparative advantage in Industry - (X/Y) Part III. Essay(s) Type here to search O e a W 8:58 PM 2/29/2020 C A blackboard.gwu.edu/bbcswebdav/pid-9899748-dt-content-rid-69871999_2/courses/73834_202001/Micro%20Assignment%207%282%29.pdf OJO Yanbing Min 2/6 5. Refer to the following graph. Which of the following is true in a free trade situation for Country 1? The Heckscher-Ohlin (H-O) Model Effects of Trade on Welfare PX Country 1 Y P I before trade P, world 700 600 400 D B O 600 800 X Trade theories 35 Country 1 exports 200 units of X and imports 300 units of Y. + a. b. Country 1 imports 200 units of X and exports 300 units of Y. C . d. Country 1 exports 600 units of X and imports 100 units of Y. Country 1 imports 600 units of X and exports 100 units of Y. Type here to search O me a 9 W 8:56 PM 2/29/2020
