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Suppose Domestic Demand: PD-1500-0.25Q and Domestic Supply: PS-300+0.5Q. a. Assuming NO international trade, calculate total surplus. b. Assuming free trade with the horizontal world
Suppose Domestic Demand: PD-1500-0.25Q and Domestic Supply: PS-300+0.5Q. a. Assuming NO international trade, calculate total surplus. b. Assuming free trade with the horizontal world market supply curve at Pw=$1,000, compute how many units of good would be imported. c. Let us assume that the government decides to impose a $50 tariff on imported goods. How much would the government collect in Tariff Revenue? S d. Calculate the deadweight loss caused by the $50 tariff. S
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ANSWER a The total surplus in the market will be the area between the demand and supply curves In t...
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
