Question - Suppose that the domestic demand and supply of a country are as follows:
Qd = 50 - 0.25 P
Suppose the world price Pw = $50.
1. Find the equilibrium before the country is open to the world.
2. Find the equilibrium after the country is open to the world.
3. Plot the equilibrium after the country is open to the world.
4. Calculate the CS, PS, and TS after opening to trade.
Suppose now a tariff of $10/unit is imposed.
5. Compute the CS, PS, gov's tax, and DWL.