Dr. Shishkin
ECON 2106
Assignment #25
Fall 2010
Answers
Global Markets
The figure above shows the U.S. demand and U.S. supply curves for cherries. Refer to this figure
to answer questions 1-4.
1) Suppose the world price of cherries is $2 per pound. What would be U.S. consumption of
cherries at this price?
200,000
2) At a world price of $2 per pound, what would be the production of cherries in the United
States?
600,000
3) If the world price of cherries is $2 per pound, will the US export or import cherries?
export
4) What would be the amount of export/import in (3)?
600,000 - 200,000 = 400,000
Email me at [email protected], and text at (678) 524-5535 if I don’t respond
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Dr. Shishkin
ECON 2106
Fall 2010
Suppose that the figure shows the
Russian market for wheat. Refer to this
figure to answer questions 5-13. Refer
to letters (A, B, C, …) on the figure
when answering questions about
surpluses.
5) With international trade, would Russia be importing or exporting wheat?
export
6) What would the amount of export/export of wheat? 400,000
7) With international trade, consumer surplus is equal to A
8) With no international trade, consumer surplus is equal to A, B, C
9) What is consumer gain/loss from an elimination of international trade at this market?
Gain B and C
10) With international trade, producer surplus is equal to B, C, D, E, F
11) With no international trade, producer surplus is equal to E and F
12) What is producer gain/loss from an elimination of international trade at this market?
Loss of B, C, and D
13) How total surplus changes as a result of an elimination of international trade at this market?
Loss of D
Email me at [email protected], and text at (678) 524-5535 if I don’t respond
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