Nоte: Sаme infоrmаtiоn for questions 17-25. The grаph below depicts the supply and demand curves for KlunkerCars (a toy car) in a certain country. The world price of KlunkerCars with free trade is $8. When the country imposes a tariff, the world price goes down to $2 and the price in the country goes up to $11. NOTES on the graph: if two lines seem to cross, simply assume that they do cross; if they seem to cross a grid point assume that they cross at exactly that grid point. For example, the supply and demand cross at a price of $14, and a quantity of 120. Because of this convention, you can get all the exact answers for this problem, and there is no need to allow for approximations. Also, all answers are whole numbers. Please be careful in your calculations, and enter exact and whole numbers only. Suppose that the answers to the previous two questions were: loss in consumer surplus = 500; and government revenue = 1000. Calculate by how much the country as a whole gained or lost with the tariff. Enter a positive number for a gain, and a negative number for a loss. (Hint: the answer is not 500, nor is it –500.)
Nоte: Sаme infоrmаtiоn for questions 1-7, except where noted. For questions 1-7, use аny information only after it is given. At a certain point you are told which good is capital-intensive, don’t use that information to answer any questions that come before. The two figures show the Production Possibilities Frontier for two countries, Home and Foreign. Also shown for each country is the indifference curve that is tangent to its PPF. There are two factors: capital and labor. There are two goods, Movies and Books. What minimal additional piece of information would you need to answer question 1?