1 answer

1. Supply and Demand Illustration of Trade In January 2019 the cost of aluminum in US...

Question:

1. Supply and Demand Illustration of Trade In January 2019 the cost of aluminum in US dollars is $0.85. Currently, in the global aluminum market, Australia is an exporting country and Germany is an importing country a) Treating Germany as a small country, illustrate the German supply and deman the absence of trade. b) If Germany werent trading with the world, would Germany pay s0 85 for aluninum, or a price that is either higher or lower than S0.85 Explain why c) Now modify your diagram for Germany to show how the opportunity to trade at a global price of S0.85 affects Germanys consumer and producer suplus (compared with consumer and p surplus in the absence of trade). d) T reating Australia as a large country, use supply and demand diagrams for Australia and the Rest to show how a recession in Australia, which reduces Australias demand for Aluminum, will affect the world price for Aluminum?

1. Supply and Demand Illustration of Trade In January 2019 the cost of aluminum in US dollars is $0.85. Currently, in the global aluminum market, Australia is an exporting country and Germany is an importing country a) Treating Germany as a "small" country, illustrate the German supply and deman the absence of trade. b) If Germany weren't trading with the world, would Germany pay s0 85 for aluninum, or a price that is either higher or lower than S0.85 Explain why c) Now modify your diagram for Germany to show how the opportunity to trade at a global price of S0.85 affects Germany's consumer and producer suplus (compared with consumer and p surplus in the absence of trade). d) T reating Australia as a large" country, use supply and demand diagrams for Australia and the Rest to show how a recession in Australia, which reduces Australia's demand for Aluminum, will affect the world price for Aluminum?

Answers

a).

Consider the following fig.

So, here “D” be the demand and “S” be the supply of “Aluminum” in Germany, => the autarkic equilibrium “P” will be determined by the intersection of “D” and “S”. So, here the equilibrium “P” is given by “Pe”.

b).

Now, if Germany will not be connected with the world trade, => the equilibrium autarkic price will prevail that is “Pe”. Now, the autarkic price can be more, less and exactly equal to “$0.85”. Since if Germany is in autarkic situation, => the price will totally depends on the “D” and “S” and not on the “world price”.

c).

Now, let’s assume that “P” is more than “0.85”, => under free trade “Pw=0.85” will prevail “Pe” will not prevail.

Aluminum

So, here as the “P” decreases implied “CS” increases by “A+B” and “PS” decrease by “A”. So, here the total surplus increases by “B”.

d).

Now, let’s assume that Australia is a large country, => have power to influence the world “P”.

Consider the following fig.

So, here the initial world equilibrium “P” is given by “Pw1” the intersection of “MD1” and “XS1”. Now, recession cause the demand to decrease, => the import demand decrease to “MD2”, => the new world price decrease to “Pw2” the intersection of “MD2” and “XS1”. So, the world equilibrium price and the level of import both decreases.

.

Similar Solved Questions

1 answer
2. Everything remains the same as in problem #1 except we have a different time requirement...
2. Everything remains the same as in problem #1 except we have a different time requirement table for each castaway to pick a cup of berries or catch one fish. Again, we'll assume that the time requirement remains constant, no matter how much time is devoted to these activities. Suppose each of ...
1 answer
Marginal utility is a. the relative value of two goods when a utility-maximizing decision has been...
Marginal utility is a. the relative value of two goods when a utility-maximizing decision has been made. b. change in total utility that results from increasing the amount of a good consumed by one unit. c. change in the amount of a good consumed that increases total utility by one unit. d. utility ...
1 answer
Which of the following statements regarding a trial balance is incorrect? a. A trial balance is...
Which of the following statements regarding a trial balance is incorrect? a. A trial balance is a list of all of the open accounts in the ledger with their balances as of a given date. b. A trial balance is a test of the equality of debits and credits in the ledger. c. A trial balance...
1 answer
Explaim the mechanisms amd toxological effects if type 1 diabetes in this article Exposure to arsenic...
explaim the mechanisms amd toxological effects if type 1 diabetes in this article Exposure to arsenic in drinking water is associated with increased prevalence of diabetes. We previously reported an association of diabetes and urinary concentration of dimethylarsinite (DMAS"), a toxic pr...
1 answer
Identify most likely value for x BHx CHx NHx CH2Clx Please show work! Thanks!
Identify most likely value for x BHx CHx NHx CH2Clx Please show work! Thanks!...
1 answer
2. Find the values of I and V for the circuit of Figure 3, assuming that...
2. Find the values of I and V for the circuit of Figure 3, assuming that the diodes are ideal without forward bias voltage. +15V - +15V W SkΩ 10102 1.542 Dit DI 66 448 D: Ben D: @ wetu V 1212 -15V (c) Figure 3...
1 answer
Suppose Y is uniformly distributed on (0,1), and that the conditional distribution of X given that...
Suppose Y is uniformly distributed on (0,1), and that the conditional distribution of X given that Y = y is uniform on (0, y). Find E[X]and Var(X)....
1 answer
Hi there I need step by step solution for question mentioned above thanks 3. Solve the...
Hi there I need step by step solution for question mentioned above thanks 3. Solve the following by hand, and by using either R or SAS: Let μ1-H2,H3 be, respectively, the means of three normal distributions with a common but unknown variance σ2. In order to test, at the 0-: 0.05 significanc...
1 answer
Empire Company is a manufacturer of smart phones. Its controller resigned in October 2020. An inexperienced...
Empire Company is a manufacturer of smart phones. Its controller resigned in October 2020. An inexperienced assistant accountant has prepared the following income statement for the month of October 2020. EMPIRE COMPANY Income Statement For the Month Ended October 31, 2020 $793,400 Sales revenue Less...
1 answer
Check my work Mid-South Auto Leasing leases vehicles to consumers. The attraction to customers is that...
Check my work Mid-South Auto Leasing leases vehicles to consumers. The attraction to customers is that the company can offer competitive prices due to volume buying and requires an interest rate implicit in the lease that is one percent below alternate methods of financing. On September 30, 2021, th...
1 answer
7. Circle the compounds that could be successfully react with a Grignard reagent as substrates in...
7. Circle the compounds that could be successfully react with a Grignard reagent as substrates in a Grignard synthesis. (5 points) 에 HC) O CH₂ H₃CC-CH3 8. Give the Grignard reagent and carbonyl compound need to make each of the following alcohols. (6 points, 2 each) 9. Circle the ...
1 answer
Sketch the graph of y= 8^x stating the coordinates of any points where the graph crosses the coordinate axes. Describe fully the transformation which transforms the graph Y = 8^x to the graph y = 8^(x+1)?
Sketch the graph of y= 8^x stating the coordinates of any points where the graph crosses the coordinate axes. Describe fully the transformation which transforms the graph Y = 8^x to the graph y = 8^(x+1)?...
1 answer
Amount of positive charge Q is uniformly distributed around semicirle of radius a. what is magnitude...
amount of positive charge Q is uniformly distributed around semicirle of radius a. what is magnitude and direction of electric fire field at fever P?...
1 answer
In the circuit in the figure below, the batteries have negligible internal resistance. (Take R1 =...
In the circuit in the figure below, the batteries have negligible internal resistance. (Take R1 = 2.15 Ω, R2 = 4.35 Ω, and R3= 7.00 Ω.) (a) Find the magnitude of the current in each resistor. I2.15Ω =  A I4.35Ω = A I7.00Ω = A (b) F...
1 answer
(17%) Problem 6: Two cars collide at an icy intersection and stick together afterward. The first...
(17%) Problem 6: Two cars collide at an icy intersection and stick together afterward. The first car has a mass of 1350 kg and is approaching at 6.5 m/s due south. The second car has a mass of 650 kg and is approaching at 19.5 m/s due west. 33% Part (a) Calculate the magnitude of the final velocity,...
1 answer
Does a reaction occur when aqueous solutions of sodium carbonate and lead(II) acetate are combined? yes no If a rea...
Does a reaction occur when aqueous solutions of sodium carbonate and lead(II) acetate are combined? yes no If a reaction does occur, write the net ionic equation. Use the solubility rules provided in the OWL Preparation Page to determine the solubility of compounds. Use the pull-down boxes to specif...
1 answer
Do you agree or Disagree with the following sentences and why? 1-All food additives are harmful...
Do you agree or Disagree with the following sentences and why? 1-All food additives are harmful and should not be added.Give Examples to support your answer 2-The presence of any kind of microorganism in food is evidence that it is not suitable for human consumption....
1 answer
50 Hz, 6,000 v, 25.000 kW, 2-pole synchronous generator tested. The results shown in the figure...
50 Hz, 6,000 v, 25.000 kW, 2-pole synchronous generator tested. The results shown in the figure below were obtained. From the no-load saturation curve, when the terminal voltage Va = 6000 V, the field current if = 546 A. From the short-circuit curve, when the electron current ia = 2000 A, the field ...