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,____ tons of steel are produced by U.S.firms,____ tons are bought by U.S.buyers,and ____ tons 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,____ tons of steel are produced by U.S.firms,____ tons are bought by U.S.buyers,and ____ tons 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, market equilibrium occurs at the intersection of the world supply (SU.S.+W) and demand (DU.S.) curves, which is at a price of $475. At this price, U.S. firms produce 10 tons of steel, U.S. buyers purchase 50 tons, and 40 tons are imported.

Assume the United States Is a Large Consumer of Steel