1. Suppose that the world price of a t-shirt is $20. Does this country import or export t-shirts? How many? 2. Suppose that this country engages in trade. a) Calculate the amount of consumer surplus that results in this market. b) Calculate the amount of
1. Suppose that the world price of a t-shirt is $20. Does this country import or export t-shirts? How many? 2. Suppose that this country engages in trade. a) Calculate the amount of consumer surplus that results in this market. b) Calculate the amount of.
I’m stuck on a Economics question and need an explanation.
1.Suppose that the world price of a t-shirt is $20. Does this country import or export t-shirts? How many?
2.Suppose that this country engages in trade.
a)Calculate the amount of consumer surplus that results in this market.
b)Calculate the amount of producer surplus that results in this market.
3.Suppose that the government imposes a $10 import tariff on t-shirts.
a)How many t-shirts do domestic consumers purchase after this import tariff is imposed?
b)How many t-shirts do domestic suppliers sell after this import tariff is imposed?
c)How many t-shirts does this county import?
d)Calculate the amount of consumer surplus that results in this market.
e)Calculate the amount of producer surplus that results in this market.
f)Calculate the amount of government tax revenue generated by the import tariff.
g)Calculate the amount of deadweight loss that results from the imposition of the tariff.
Problem 2 (5 marks)
Below, you are provided with three years of data on the quantities that are produced of two goods and the market price of each. You will use this data to calculate Nominal GDP and Real GDP.
Bananas and Mango are produced in Philippines. Many other final goods and services are produced in Philippines, but we will assume that Bananas and Mango are the only two final goods produced in this country. The table below provides the number of bananas and mango that are produced in Philippines in three different years. The table also provides the price of a banana and the price of a mango in each year.
Year |
Quantity of Bananas |
Price of Bananas |
Quantity of Mango |
Price of Mango |
2015 |
1,200 |
$0.75 |
600 |
$10.00 |
2016 |
1,260 |
$0.80 |
620 |
$10.50 |
2017 |
1,290 |
$1.00 |
650 |
$11.00 |
- What is the value of Nominal GDP in Philippines in 2015, 2016 and 2017?
2)Treating 2015 as the base year, calculate the value of Real GDP in Philippines in 2015, 2016 and 2017?
Problem 3 (10 marks)
Below, you are provided with two years of data on the quantities of two goods that the average, urban family of four consumes and the market price of each. You will use these data to calculate the Consumer Price Index (CPI) and inflation rate.
Cheese and Chocolate are two goods that are consumed in Holland. Many other final goods and services are consumed in Holland, but for simplicity, we will assume that Cheese and Chocolate are the only two final goods consumed in the country. The table below provides the quantity of Cheese and Chocolate that are consumed by the average, urban family of four in Holland in two different years. The table also provides the price of a Cheese and the price of chocolate in each year.
Year |
Quantity of Chocolate |
Price of chocolate |
Quantity of Cheese |
Price of cheese |
2016 |
150 |
€10.50 |
45 |
€15.00 |
2017 |
165 |
€13.00 |
52 |
€17.00 |
Suppose that 2016 is the base year.
- Calculate the CPI in 2016 and 2017. Round your answer to the nearest one-hundredth.
- Calculate the 2017 inflation rate. Round your answer to the nearest one-tenth of one percent.