Question: 4.The demand for widgets is given by = 40 2 where is the number of widgets demanded (in millions) and p is their price per

4.The demand for widgets is given by = 40 2 where is the number of widgets demanded (in millions) and p is their price per unit. The domestic supply of widgets is given by = 2 3 where is the number of widgets supplied (in millions). Widgets can also be freely imported at a price of $9 per widget. In addition, there is an import tariff on widgets of $9 per unit.

(a) What would be the equilibrium price of widgets, the quantity produced domestically and the quantity imported?

(b) Suppose that, under the terms of a new free trade agreement, the government plans to eliminate the import tariff on widgets. What would now be the equilibrium price of widgets, the quantity produced domestically and the quantity imported?

(c) Who gains and who loses from the free trade agreement and by how much? How much better off or worse off is society as a result?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

4.The demand for widgets is given by = 40 2 where is the number of widgets demanded (in millions) and p is their price per unit. The domestic supply of widgets is given by = (2/3) where is the number...

eco9 Read Case 5-1: Netflix on pages 181-182. Complete one of the following for your original post. Responses to peers can include additional examples from personal experience, additional support for...

rt On January 10th, 2022 Penny and Nicole entered into a single futures contract for May deliver of crude oil (Ticker CLK2, or CLK22.NYM). Penny took a short position and Nicole took a long position....

DigiTek is a start-up company financed with 50% debt and 50% shareholders' equity. The debt outstanding is a zero-coupon bond which has a face value of $1,000,000 and a remaining maturity of two...

Please help Consider the following employment data. (4 points) SAINTOPIA NATIONAL EMPLOYMENT DATA Total Adult Population- 100.000 Part-Time Employed- 20,000 Full-Time Employed- 52.000 Unemployed-...

The dally marginal revenue function associated with selling x widgets is given by R (x) - -18x2 + 10x + 45 where R'(x) is measured In dollars per unit per day and x denotes the number of widgets...

Question 28 3 pts Refer to the table on a firm using labor as the variable input: 1 2 5 6 7 00 9 # Laborers Total Output 0 0 3 18 4 24 10 39 5 11 29 33 36 38 39 There exists increasing returns to...

Please answer the following questions. No need for a detailed answer or detailed explanation, just write the correct one. Thankyou!! URGENT!!!! 1. Which statement best completes a short definition of...

Answer the following question and write down the explanation how the answer was found. Question 1 (1 point) Household expenditure (thousands of dollars per year) 32 24 16 8 8 16 24 32 40 Household...

Attempt all the questions. > Jermaine likes to eat ramen noodles. When his income rose last year by 10%, his consumption of ramen noodles fell by 5%. Therefore, the income elasticity of demand is...

See Fig. 97. Consider the scatterplot and the graph of the model f(x) = abx in the figure. Sketch the graph of an exponential model that describes the data better; then explain how you would adjust...

Dell Darling's portfolio is worth $12,000 at the beginning of a 30-day month. On day 10 of the month, Dell received a contribution to the portfolio of $800. At the end of the month, Dell's portfolio...

Highlight how regular reconciliations help strengthen internal controls over cash and protect against fraud.

The previous question I sent regarding structure of National Kidney foundation is not correct. Main office is in New York CEO is Kevin Longino

11. Now consider the different goals you have for your life in the future. See these goals in relation to your core values and your roles. How do goals affect your roles and your values? Development...

Does this future have a sound, an image, a taste or a smell that you can evoke here and now?

2. In this chapter, the reader should reflect on the following concepts: benchmark-ing, competence development, thought dispositions, identity and perception.