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Question 1:
i)
Answer:
Q =?
Price per
minute = $2.00
Yearly
demand is: P = 11 - 0.1Q
2 = 11 - 0.1Q
2 – 11 = -0.1Q
-9 = -0.1Q
9/0.1 = Q
90 = Q
Hence, 90
minutes of calls would he or she make under plan.
ii)
Answer:
i)
Consumer surplus calculation for Price (P=$2 per minute)
Y intercept
where quantity equals to zero
Q = 0
P = 11 –
0.1(0)
P=11 à Y Intercept
Maximum
price consumer will pay = Q x $2
=90 x $2 =
$180
Hence
consumer surplus would be = 1/2 x height x base
 |
= ½ x 11 x 180 = 990
ii)
Consumer surplus calculation for Price (P=$129 flat charge per
year)
Y intercept where
quantity equals to zero
Q = 0
P = 11 –
0.1(0)
P=11 à Y Intercept
Maximum
price consumer will pay = $129
Hence
consumer surplus would be = 1/2 x height x base
 |
= ½ x 11 x 129 = 709.5
Question 1b:
Data:
Qd = 700 -
2P
Qs = 100 +
4P
100 + 4P =
700 – 2P
4P + 2P =
700 – 100
6P = 600 or P
= 100
Q = 700 –
2(100) = 500
By adding
government imposed price ceiling $50, new price should be: P= 100 + $50 = $150
Qd = 700 –
2(150) = 700 – 300 = 400
Change in Qd
= 500 – 400 = 100
 |
Deadweight
loss = area of triangle S=ah/2 by calculus (integration) =
100*50/2 = 2500
The
magnitude of the deadweight loss depends on how much the quantity supplied and
quantity demanded respond to changes in the price.
Suppose a
price floor of $300
Qs = Qd + 900
100 + 4P = 700 – 2P + 300
100 -700 - 300
= -4P -2P
- 900 = -6P
or 150 = P
Hence price
floor of $300 will result in same magnitude of deadweight loss with P = $150
and Change in Qd = 100.
Question 2: Answer
For the
examination, we expect the most elevated conceivable levy edge and that the
duty is completely gone through to import costs. Given that Vietnam represents
over a large portion of U.S. catfish imports, import costs would increment by
around 35 percent if all imports from Vietnam were evaluated a tax of 63.88
percent. The impact of the real levies on import costs is likely much littler;
nonetheless, as the outcomes will show, even with the most elevated conceivable
edge and biggest import cost build, the advantage to the U.S. catfish industry
is still moderately humble.
Given the
levy or inconvenience of antidumping obligations of somewhere around 34% and
64% in 2003, imports of pangasius dropped from 46 million pounds in 2002 to
37.5 million pounds in 2005. By 2008, nonetheless, imports of
"catfish" (from Vietnam and different nations) had come to 110
million pounds. U.S. generation, then, has kept on sliding, from a crest of 660
million pounds in 2003 to 480 million pounds in 2009.Following are the conceivable
approach impacts on U.S cost of catfish:
A. Changes in Catfish food costs
B. Effects of TCI promoting consumptions
C. Effects of different hostile to dumping tax
levels
D. Effect of COOL (Country of Origin Labeling)
E. Changes in U.S. every capita pay
F. Changes in return rates with U.S. $
The
conceivable impacts of catfish evaluating on U.S economy will be as taking
after:
·
COOL will
advantage U.S. homestead raised catfish possibly, however hurt channel catfish
imports essentially and bring about an increment in U.S. customers and
ranchers' excess; nonetheless, U.S. processors' surplus will decay
insignificantly as indicated in figure underneath:
·
Increment in
U.S. every capita salary would have a positive effect on the catfish business
in general, with a more noteworthy positive effect on imported channel catfish
and imported basa/tra.
·
Expanded
Exchange Rate Vietnam versus U.S (VND/USD) will come about as taking after:
Ø Increase basa/tra imports.
Ø Decrease channel catfish import.
Ø Marginally extend U.S. farm raised market of
catfish.
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