The demand for VCRs in a certain country is given by: D 8000-30P, where P is the

Question

The demand for VCRs in a certain country is given by: D 8000-30P, where P is the price of a VCR. Supply by domestic VCR producers is: S-4000+10P 2. If this economy opens to trade while the world price of a VCR is $50, and the government imposes a tariff of $30 per VCR, then this country will A. import 800 B. import 400 C. export 800 D. import 200 E. export 1600 VCRs 3. If this economy opens to trade while the world price of a VCR is $50, and the government imposes a tariff of S30 per VCR, then the tariff revenue collected by the government will be A. $4000 B. $40,000 C. $60,000 D. $24,000 E. $64,000 4. If this economy opens to trade while the world price of a VCR is $50, how many VCRs will be imported or exported? A. 3000 imported B. 2000 imported C. 2000 exported D. 1000 imported E. 1000 exported

Explanation / Answer

2. Effective price = 50 + 30 = $80

D = 8000 - 30 x 80 = 5600

S = 4000 + 10 x 80 = 4800

Imports = D - S = 800

Option A is correct

3.

Tariff revenue = 30 x Import quantity

Tariff revenue = 30 x 800 = $24000

Option D is correct

4.

P = $50

D = 6500

S = 4500

Imports = D - S = 2000

Option B is correct

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