Consider a 2 nation world consisting of the United States and Mexico, who both p
ID: 2717647 • Letter: C
Question
Consider a 2 nation world consisting of the United States and Mexico, who both produce strawberries. Assume there are no trade barriers or international transportation costs. To the right are tables that represent the markets for strawberries in the U.S. and Mexico. Mexican prices have been converted to U.S. dollars. Use the tables on the right to answer the following questions:
Question 5 of 14 Map saplina learning United States Price perQuantity Quantity Pound Consider a 2 nation world consisting of the United States and Mexico, who both produce strawberries. Assume there are no trade barriers or international transportation costs. To the right are tables that represent the markets for strawberries in the U.S. and Mexico. Mexican prices have been converted to U.S. dollars SuppliedDemanded In $2 $3 $4 $5 $6 in millions) millions) 300 350 400 450 500 550 600 500 450 400 350 300 250 200 Use the tables on the right to answer the following questions What is the equilibrium world price per pound? Number $8 Mexico Price per Quantity Quantity What is the equilibrium quantity of exports and imports? Pound Supplied Demanded (in millions) millions) 400 Number $2 800 750 700 650 600 550 500 Million Pounds 450 500 $4 $5 $6 $7 $8 Which country will export strawberries? 550 600 650 700 O United States Mexico Previous Give Up & View Solution (s) Check Answer Next Exit HintExplanation / Answer
Answer :
It is observed that the deman Supply equilbrilum comes a
it is observed from above that upto price $4 there is shortage of strawberries particularly in Mexico i.e at cheaper price , and the demand supply equilibrium stood at price $ 5.00 per pound. However , Mexico will export 100 million pound [lbs] to USA.
The equilibrium quantity is 1000 million pounds [ combining the both countries] The demand and supply of both countries together is equals to supply.
USA will export strawberries to Mexico and in other countries when the price of Strawberries stand $5.00 per pound and above, and when supply stood above 450 million pounds.
However, Mexico shall export to other counties when the supplies goes above 600 million pounds and price fetches at 7.00 or above [ this is to be construed as additional information for understanding, not a pert of question asked for].
The End
Price per lbs $ Total supply both Total demand both Deficit surplus 2.00 700 1300 600 - 3.00 800 1200 400 - 4.00 900 1100 200 - 5.00 1000 1000 - 6.00 1100 900 - 200 7.00 1200 800 - 400 8.00 1300 700 - 600Related Questions
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