ECON 3HH3 Study Guide - Quiz Guide: Tariff, Import Quota, Demand Curve

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Home assignment #8: answer key: (4 points) consider the large home country with the demand curve for tuna given by (p is the price per. 10kg, and q is the quantity of tuna with 1 unit being 10 kg): p =400 q, and the home supply curve given by. Assume that the foreign export supply curve is given by p=qexp 320. (a) derive the home import demand curve (derive the exact equation). Calculate the world price of 10 kg of tuna. Answer: qdemanded = 400 - p, qsupplied = (p/4), so. M=qdemanded qsupplied = 400 - p (p/4) = 400 1. 25p, or p = 320 0. 8m. Calculate the new world price, the new imported quantity and the tariff revenues collected by the government. (hint: use figure 8. 9. ) New x* + t curve is p+tariff = qexp - 320 + tariff = qexp - 310. Qexp = m, so m - 310 = 320 0. 8m or 1. 8m=630 or m = 350.

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