Assume the United States is a large consumer of steel that is able to influence the world price. Its demand and supply schedules are respectively denoted by DU.S. and SU.S. in Figure 4.2. The overall (United States plus world) supply schedule of steel is denoted by SU.S.+W.
Figure 4.2. Import Tariff Levied by a "Large" Country ?
-Consider Figure 4.2.With free trade, the United States achieves market equilibrium at a price of ____.At this price, ____ of steel are produced by U.S.firms, ____ are bought by U.S.buyers, and ____ are imported.
A) $450, 5 tons, 60 tons, 55 tons
B) $475, 10 tons, 50 tons, 40 tons
C) $525, 5 tons, 60 tons, 55 tons
D) $630, 30 tons, 30 tons, 0 tons

Question

Assume the United States is a large consumer of steel that is able to influence the world price. Its demand and supply schedules are respectively denoted by DU.S. and SU.S. in Figure 4.2. The overall (United States plus world) supply schedule of steel is denoted by SU.S.+W.
Figure 4.2. Import Tariff Levied by a "Large" Country  ?
-Consider Figure 4.2.With free trade, the United States achieves market equilibrium at a price of ____.At this price, ____ of steel are produced by U.S.firms, ____ are bought by U.S.buyers, and ____ are imported.
A) $450, 5 tons, 60 tons, 55 tons 
B) $475, 10 tons, 50 tons, 40 tons 
C) $525, 5 tons, 60 tons, 55 tons 
D) $630, 30 tons, 30 tons, 0 tons

Quizplus · Accepted Answer

With free trade, the equilibrium price is $475, where U.S. firms produce 10 tons, U.S. buyers purchase 50 tons, and 40 tons are imported to meet the demand.

Assume the United States Is a Large Consumer of Steel