X Chapter 06: Tracking the U.S. Economy : Reading CENGAGE |MINDTAP Q, Search this course Aplia Homework: International Trade X In the absence of trade with China, the equilibrium price of a jacket is At this price, both the domestic quantity demanded and the domestic quantity supplied equal ( million jackets Suppose that trade between the United States and China is open and that the United States Initially imposes no tariffs or quotas on jackets imported O from China. Assume that China has a comparative advantage in producing jackets and charges the world price of $3 per jacket. (Note: Throughout the problem, assume that the amount demanded by any one country does not affect the world price of jackets.) On the graph, use the grey line (star symbol) to indicate the world price of jackets. At the world price of $3 per jacket, the quantity of jackets demanded by U.S. buyers is ( million jackets, the quantity of jackets supplied by A U.S. manufacturers is million jackets, and the quantity of jackets imported from China is million jackets. ? Suppose now that the United States places a quote on imports of jackets from China, which limits imports of Chinese jackets to 10 million. (Hint: Th original domestic supply curve represents domestic production only.) On the previous graph, use the purple line (diamond symbol) to indicate the new U.S, price under the quota. Under the quota, the price of jackets is [ the quantity supplied by U.S. producers is million jackets, and the quantity demanded by U.S. consumers is million jackets. Compared to conditions under free trade, U.S. manufacturer sell jackets and receive price after the imposition of the