Question

please help! I know the answers but I don't know how to get them.

Figure EXF. Suppose D represents the market demand curve of US consumers. Then US firms begin to export to the UK, and US and UK consumers have a combined market demand at D'. The line S is US market supply. DI 5 10 15 20 25 30 35 40 45 50 55 60 Q 26. See Figure EXF. After exports begin, the surplus of US producers a. increases by $250. b. does not change. c. goes to zero. d. decreases by $250. 27. See Figure EXF. After exports begin, tthe consumer surplus of US consumers a. increases by $150. b. decreases by $150. c. increases by $50. d. decreases by $50. 28. See Figure EXF. The demand curves D and D' imply that some of the UK consumers than any of the US consumers. a. have higher WTP b. have more elastic demand c. have lower incomes d. have less elastic demand

Answer 1

is 32 R: 10 30 Prusctucer surplus area lulow Pruce une & abone suftly curne = + area A un puoducer suplus MPS Imrease in fuoducir surflus = area MOSP+ arua o AOP's (20)(30 -20) +! x(30-20)(30 -20) %3D (20)(10) + (10)(10) 250 moeases liy $250 aus

Cosunth seuaplus avone fice lunie (27 - larea uelow denmand u me as fuie is higner s conslimes is fulling fer CS hence Becice line shifteal u Aspurarods A in consumer suoplus for us roneumey MNQS) (area Decreace in consumer surflus = aua g a o MN RQ +area ANRS (10)(30 -20) + X(20-10(30-20) lo0+ 50 ons 6) ducrease ly$ I5O

28. Answer a. Have higher WTP. (Willingness to pay)

For example: at quantity 25. US consumers are willing to pay a price of $15 (from D). But for the same quantity of 25, the combined price is $35, hence UK consumers have high WTP

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