The accompanying table shows the U.S. domestic demand schedule and domestic supply schedule for oranges.

1. Create an equation for domestic supply.
2. Create an equation for domestic demand.
3. Draw a supply and demand diagram for the domestic orange market.
4. What is the equilibrium price and quantity under autarky?
5. Suppose that the country lifts its restrictions on international trade and the world price is $0.30.

5a) How many oranges will be supplied by domestic producers?

5b) How many oranges will be imported?

1. Suppose that the United States levies a tariff on the import of oranges in the amount of $0.20 per orange.
2. How many oranges will be imported under this policy?
3. What is the deadweight loss of this policy?
4. What is the government revenue produced by this policy?

Suppose that the United States introduces an import quota of 3,000 oranges and

1. assigns the quota rents to foreign orange exporters.
2. What will be the domestic price of oranges after the introduction of the
3. quota?
4. What is the value of the quota rents that foreign exporters of oranges
5. receive?

Quantity of Quantity of Price of oranges demanded oranges supplied orange (thousands) (thousands) $1.00 11 0.90 10 0.80 0.70 0.60 10 0.50 12 0.40 14 0.30 16 4 0.20 18