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Category > Economics Posted 05 Jun 2017 My Price 7.00

The nation of Acirema

The nation of Acirema is “small” and unable to affect world prices. It imports peanuts at

the price of

$10

per bag. The demand and supply curves are:

D = 400 −10P S= 50 + 5P.

Determine the free trade equilibrium. Then calculate and graph the following effects of an

import quota that limits imports to 50 bags.

1. The increase in the domestic price.

2. The quota rents.

3. The consumption distortion loss.

4. The production distortion loss.

Answers

(15)
Status NEW Posted 05 Jun 2017 07:06 AM My Price 7.00

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