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Please help me check if the graphs are correct or not. 14. Read Chapter 8.4. Consider the market for manufactured goods from lecture 9. Where
Please help me check if the graphs are correct or not.
14. Read Chapter 8.4. Consider the market for manufactured goods from lecture 9. Where D(p) = 100 - p and S(p) = p. Suppose the world price is Pworld = 25. a. Suppose the US opens to free trade in manufactured goods. Calculate the D ( so ) * lov- so : 50 equilibrium price, domestic quantity demanded, and domestic quantity supplied. Also calculate whether the UK is an importer or exporter of food, 100 - P = P P - so and the associated quantity of imports/exports. Draw a supply demand graph representing all this information. Also, label consumer surplus and producer surplus. (2pt) . VK will be an importer 10 0 S of food . They will import so , as domestic Qd is 75 and the 50 CS DWL domestic Qs is 25. 25 . The equilibrium price will be $ 25 Pworld after trade and $50 without PS trade. D 25 75 domestic Qs domestic Qd16. The UK recently voted to leave the EU, often referred to as Brexit. Suppose the 40- 2p= 30-15 domestic market for food in the UK is described by: D(p) = 40 - 2p = 18 55 = 5p S(p) = 3p - 15 = 18. p = 11 a. Calculate the equilibrium price and quantity. Draw a supply demand graph with no trade. Label all relevant features, including the equilibrium price and quantity, consumer surplus and producer surplus. (2pt) Equilibrium Price : Ell S Equilibrium quantity = 18. PS 5 18 trade price ? b. Suppose (for simplicity) that the UK only trades with the EU and the EU price for food is Pworld = 8. Modelling the UK in the EU as having free trade calculate the equilibrium price, domestic quantity demanded, and domestic quantity supplied. Also calculate whether the UK is an importer or exporter of food, and the associated quantity of imports/exports. Draw a supply demand graph representing all this information. Also, label consumer surplus and producer surplus. (2pt) VK is importer as domestic bed > domestic Q,. They will import 24- 9 = 15 mith Equilibrium price be fore trade : $/1 after trade : $ 8 CS T OWL Pworld PC 18 24 domestic domestic Q 5 Qd c, If Brexit leads to no trade with the EU. How will this affect consumerStep by Step Solution
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