Consider the market for makers in imaginary economy

Assignment Help Business Economics

Reference no: EM131169430

Consider the market for makers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of a meeker is $32. Suppose that the world price for a meeker is $24. Assume that Meekertown is too small to influence the world price for meekers once they enter the international market.

1. If Meekertown allows free trade, then it will _______ meekers. (export/import)

Given current economic conditions in Meekertown, complete the following table by indicating whether each of the statements is true or false.

1. Meekertownian consumers are better off under free trade than they were before. (true/False)

2. Meekertownian producers are better off under free trade than they were before. (true/false)

3. True or False: When a country is too small to affect the world price, allowing for free trade will never increase total surplus in that country, regardless of whether it imports or exports as a result of international trade. (true /false)

Reference no: EM131169430

Questions Cloud

Aniticipate making single lump sum investment : Your employer has anticipated needing $60,000 in 2.5 years to finance the purchase of new machine. If they aniticipate making a single lump sum investment today into a savings account that will return 12% interest compounded continuously, how much mo..

What would be the equivalent equal bimonthly payments : An employee has been offered a 5 year contract for a position at a company. They offered 3 different payment terms and asked you to decide your preferred option. If each of these options are to be paid 2 times per month in equal installments,instead ..

Do you think this firm enjoys much market power : A firm has $2.5 million in sales, a Lerner index of 0.67, and a marginal cost of $50, and competes against 800 other firms in its relevant market. What price does this firm charge its customers? By what factor does this firm mark up its price over ma..

Calculate the four-firm concentration ratio : An industry consists of four firms with sales of $300,000, $700,000 and $250,000, and $400,000. Calculate the Herfindahl-Hirschman index. Calculate the four-firm concentration ratio.

Consider the market for makers in imaginary economy : Consider the market for makers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of a meeker is $32. Suppose that the world price for a meeker is $24. Meekertownian consumers are better off under free t..

Suppose the marginal propensity to consume : Suppose the marginal propensity to consume (MPC) for a nation is 0.7. What is the tax multiplier for this nation? What is the tax multiplier for this nation if a $150 increase in taxes reduces real GDP by $450?

Some declines in money supply and price level : Consider the application of the IS/LM model to the Great Depression. In 2002, Ben Bernanke was speaking for the entire Federal Reserve Bank and admitted to mistakes in the policy response to the economic downturn in the 1930s. Recall that the data sh..

Two firms compete in a homogeneous product market : Two firms compete in a homogeneous product market where the inverse demand function is P = 10 -2Q (quantity is measured in millions). Firm 1 has been in business for one year, while Firm 2 just recently entered the market. Each firm has a legal oblig..

Conventional morality and post-conventional morality : What are the differences between pre-conventional morality, conventional morality, and post-conventional morality? Give an example of each. Describe at least three situations in which you would not purchase the products of a firm even though it is ve..

User Account

All Pages