1. Following are tables showing the domestic supply and demand schedules and the
ID: 1187185 • Letter: 1
Question
1. Following are tables showing the domestic supply and demand schedules and the export supply and import demand schedules for two nations (A and B).
NATION A
Price
Qdd
Qsd
Qdi
Qse
$3.00
100
300
0
200
2.50
150
250
0
100
2.00
200
200
0
0
1.50
250
150
100
0
1.00
300
100
200
0
a. For nation A, the first column of the table is the price of a product. The second column is the quantity demanded domestically (Qdd). The third column is the quantity supplied domestically (Qsd). The fourth column is the quantity demanded for imports (Qdi). The fifth column is the quantity of exports supplied (Qse).
(1) At a price of $2.00, there (will, will not) ___________ be a surplus or shortage and there ____________ be exports or imports.
(2) At a price of $3.00, there will be a domestic (shortage, surplus) ______________ of _____ units. This domestic _____________ will be eliminated by (exports, imports) _____________ of ______ units.
(3) At a price of $1.00, there will be a domestic (shortage, surplus) ______________ of _____ units. This domestic ______________ will be eliminated by (exports, imports) _____________ of ______ units.
NATION B
Price
Qdd
Qsd
Qdi
Qse
$2.50
100
300
0
200
2.00
150
250
0
100
1.50
200
200
0
0
1.00
250
150
100
0
b. For nation B, the first column is the price of a product. The second column is the quantity demanded domestically (Qdd). The third column is the quantity supplied domestically (Qsd). The fourth column is the quantity demanded for imports (Qdi). The fifth column is the quantity of exports supplied (Qse).
(1) At a price of $1.50, there (will, will not) ___________ be a surplus or shortage and there _____________ be exports or imports.
(2) At a price of $2.50, there will be a domestic (shortage, surplus) _______________ of _____ units. This domestic ______________ will be eliminated by (exports, imports) _____________ of ______ units.
(3) At a price of $1.00, there will be a domestic (shortage, surplus) _______________ of _____ units. This domestic ______________ will be eliminated by (exports, imports) _____________ of ______ units.
c. The following table shows a schedule of the import demand in nation A and the export supply in nation B at various prices. The first column is the price of the product. The second column is the quantity demanded for imports (QdiA) in nation A. The third column is the quantity of exports supplied (QseB) by nation B.
Price
QdiA
QseB
$2.00
0
100
1.75
50
50
1.50
100
0
(1) If the world price is $2.00, then nation (A, B) _____ will want to import _____ units and nation _____ will want to export _____ units of the product.
(2) If the world price is $1.75, then nation (A, B) _____ will want to import _____ units and nation _____ will want to export ______ units of the product.
(3) If the world price is $1.50, then nation (A, B) _____ will want to import _____ units and nation _____ will want to export ___________ units of the product.
Price
Qdd
Qsd
Qdi
Qse
$3.00
100
300
0
200
2.50
150
250
0
100
2.00
200
200
0
0
1.50
250
150
100
0
1.00
300
100
200
0
Explanation / Answer
a)
1)will not,will not
2)surplus, 200,surplus,exports,200
3)shortage,200,shortage,import,200
b)
1)will not,will not
2) surplus, 200,surplus,exports,200
3)shortage,100,shortage,import,100
c)
1)A,0,B,100
2)A,50,B,50
3)A,100,B,0
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