Page 1Page 2Page 3Page 4Page 5Page 6Page 7Page 8Page 9REVIEW 8.1 (U.S. IMPORT DEMAND) US demand is P = 48 - 2Q, and US supply is P = 16 + 2Q. 1. Derive the U.S. autarky price.2. Derive U.S. import demand.REVIEW 8.2 (MEXICAN EXPORT SUPPLY & WORLDEQUILIBRIUM) Mexican demand is P* = 32 - 2Q*, and Mexicansupply is P* = 2Q*. 1. Determine the Mexican autarky price.2. Derive Mexican export supply.3. Derive the world price under free trade.4. Derive US imports under free trade.5. Derive Mexican exports under free trade.6. Derive the US quantity demanded and quantity suppliedunder free trade.REVIEW 8-3 (US IMPORT TARIFF)Suppose the United States now places a specific tariff t = 8. 1. Derive the tariff-ridden US import demand.2. Derive the tariff-ridden Mexican price.3. Derive the tariff-ridden US price.4. Derive the tariff-ridden volume of trade (imports or exports).5. Derive the tariff-ridden US quantity demanded and quantitysupplied.REVIEW 8-4 (US WELFARE)1. Derive the change in US producer surplus due to the tariff.2. Derive the change in US consumer surplus due to the tariff.3. Derive the change in US government revenue due to thetariff. 4. Derive the change in US welfare due to the tariff.5. Derive the production distortion, consumption distortion,efficiency loss, and TOT effect for the United States.REVIEW 8.1 SOLUTIONS (US IMPORT DEMAND)US demand is P = 48 - 2Q, and US supply is P = 16 + 2Q. 1. Derive the US autarky price.The US autarky price equates US demand and US supply. 2. Derive US import demand.US import demand is the amount that quantity demandexceeds quantity supplied for various prices.REVIEW 8.2 SOLUTIONS (MEXICAN EXPORT SUPPLY &WORLD EQUILIBRIUM) Mexican demand is P* = 32 - 2Q*, andMexican supply is P* = 2Q*. 1. Derive the Mexican autarky price.Mexican autarkic price equates Mexican demand andMexican supply.2. Derive Mexican export supply.Mexican export supply is the amount that supply exceedsdemand for various prices.3. Derive the world price under free trade.The world price equates US import demand and Mexicanexport supply. 4. Derive US imports under free trade.US imports under free trade are5. Derive Mexican exports under free trade.Mexican exports under free trade are also6. Derive the US quantity demanded and quantity suppliedunder free trade.REVIEW 8-3 SOLUTIONS (US IMPORT TARIFF)Suppose the United States now places a specific tariff t = 8. 1. Derive the tariff-ridden US import demand.2. Derive the tariff-ridden Mexican price.3. Derive the tariff-ridden US price.4. Derive the tariff-ridden volume of trade (imports or exports).5. Derive the tariff-ridden US quantity demanded and quantitysupplied.REVIEW 8-4 SOLUTIONS (US WELFARE)1. Derive the change in US producer surplus due to the tariff.2. Derive the change in US consumer surplus due to the tariff.3. Derive the change in US government revenue due to thetariff. 4. Derive the change in US welfare due to the tariff.5. Derive the production distortion, consumption distortion,efficiency loss, and TOT effect for the United States.12 16 20 24 28 32 36 0 4 8 12 16 Quantity Traded8.4 World Market with U.S.TariffX*MM'db12 16 20 24 28 32 36 0 2 4 6 8 10 12 14 16 U.S. Quantity8.5 U.S. Market with U.S.
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