10 Kawmin is a small country that produces and consumes jelly beans.

The world price of jelly beans is \$1 per bag, and Kawmin’s domestic

demand and supply for jelly beans are governed by the following

equations:

Demand: QD = 8 – P

Supply: QS = P

Where P is in dollars per bag and Q is in bags of jelly beans.

a Draw a well-labelled graph of the situation in Kawmin if the

nation does not allow trade. Calculate the following (recalling

that the area of a triangle is 1_

2 x base x height): the equilibrium

price and quantity, consumer surplus, producer surplus and total

surplus.

b Kawmin then opens the market to trade. Draw another graph to

describe the new situation in the jelly bean market. Calculate the

equilibrium price, quantities of consumption and production,

imports, consumer surplus, producer surplus and total surplus.

c After a while, the President of Kawmin responds to the pleas of

jelly bean producers by placing a \$1 per bag tariff on jelly bean

imports. On a graph, show the effects of this tariff. Calculate the

equilibrium price, quantities of consumption and production,

imports, consumer surplus, producer surplus, government

revenue and total surplus.

d What are the gains from opening up trade? What are the

### 1 個解答

• 慈信
Lv 4
6 年前
最佳解答

a. The nation does not allow trade:

https://www.flickr.com/photos/127045943@N07/162265...

Demand: QD = 8 – P

Supply: QS = P8-P=P , P=4 , Q=4the equilibrium price and quantity : P=4 , Q=4consumer surplus= 1/2* 4*4=8.........△ABCproducer surplus=1/2*4*4=8............△OABtotal surplus=CS + PS =16

b. opens the market to trade :

https://www.flickr.com/photos/127045943@N07/156085...

equilibrium price = 1the quantities of consumption=7the quantities of production=1

consumer surplus=1/2*7*7=24.5.......△CEGproducer surplus=1/2*1*1=0.5...........△OEFtotal surplus=CS+PS=24.5+0.5=25 c. the please of jelly bean producers by placing a \$1 per bag tariffon jelly bean :

https://www.flickr.com/photos/127045943@N07/162283...

The equilibrium price=2The quantities of consumption=6The quantities of production=2

consumer surplus=1/2*6*6=18..........△CHJproducer surplus=1/2*2*2=2.............△OHIgovernment revenue=1*4=4..............□IKLJtotal surplus=CS+PS=18+2=20 d. What are the gains from opening up trade?total surplus from 16 to 25, add 9　 deadweightlosses from restricting trade with the tariff=1/2+1/2=1

2015-01-08 23:18:36 補充：

deadweightlosses from restricting trade with the tariff = △FIK + △GLJ = 1/2 + 1/2 = 1

參考資料： 經濟學