Problem
Table 17P-1 shows the domestic supply and demand schedule for rice in Thailand.
a. In autarky, what is the domestic quantity supplied and price?
b. The world price of rice is $1.25 per kilogram. If Thailand opens up to trade in rice, what will be the new domestic price of rice?
c. What quantity of rice will be supplied by domestic producers?
d. What quantity of rice will be demanded by domestic consumers?
e. How much rice will Thailand import or export?
Table 17P-1
|
Price of rice
($/kg)
|
Quantity demanded
(millions of kg)
|
Quantity supplied (millions of kg)
|
|
3.50
|
2,100
|
3,300
|
|
3.25
|
2,150
|
3,200
|
|
3.00
|
2,200
|
3,100
|
|
235
|
2,250
|
3,000
|
|
2.50
|
2,300
|
2.900
|
|
1.25
|
2,350
|
2.800
|
|
1.00
|
2,400
|
2.700
|
|
0.75
|
2,450
|
2.600
|
|
0.50
|
2,500
|
2.500
|
|
0.25
|
2,550
|
2,400
|
