Consider a planet called Timber Hearth that is served by a monopolist. Market demand is P = 35 3 QD, and the monopolist's marginal cost curve is MC = 7 + QS.

3.1 What is the slope of the monopolist's marginal revenue curve? (Hint: demand is linear)

A -3

B -6

C -1

D 0

3.2 Compute the monopolist's revenue in the autarkic equilibrium

3.3 Compute consumer surplus in the autarkic equilibrium

For 3.4 - 3.8, suppose export supply is perfectly elastic at P W = 10

3.4 Compute the monopolist's revenue in the free trade equilibrium

3.5 Compute the increase in consumer surplus by opening up to free trade

3.6 Compute the quantity imported in free trade

3.7 Suppose a tariff of 2 is placed on imports. Compute the new quantity imported

3.8 Consider an import quota equal to your answer in 3.7. Which statement is most likely:

A Consumer surplus will be higher with the quota than with the tariff

B Consumer surplus will be lower with the quota than with the tariff

C Consumer surplus will be the same with the quota and with the tari