If S = P represents a country's home supply curve and D = 100 – P represents its home demand curve, then the equilibrium price and quantity in autarky are:

Question

BlackTom AI · Accepted Answer

Consider the autarky setup where the home supply curve is S = P and the home demand curve is D = 100 − P.
First, translate these into quantity supplied and demanded as functions of price: Qs = P and Qd = 100 − P.
To find the autarky equilibrium, set quantity supplied equal to quantity demanded: P = 100 − P.
Solving gives 2P = 100, so P = 50. Substituting back, Qs = 50 and Qd = 50, so the equilibrium quantity is 50 units.
Now evaluate each option:
Option 1: $50 and 50 units. This matches both the equilibrium price and equilibrium quantity derived above, so it is consistent with autarky.
Option 2: $0 and 100 units. If price were 0, quantity supplied would be 0 and quantity demanded would be 100, which is not an equilibrium since supply does not equal demand at P = 0.
Option 3: $100 and 0 units. At price 100, quantity supplied would be 100 and quantity demanded would be 0, again not an equilibrium because Qs ≠ Qd at P = 100.
Option 4: $75 and 25 units. Here Qs = 75 and Qd = 25, which are not equal, so this price-quantity pair does not satisfy the equilibrium condition Qs = Qd.
In summary, only the first option aligns with the equilibrium condition derived from equating supply and demand given S = P and D = 100 − P.

01:220:300:01 INTERNATIONAL ECON Trade barriers practice questions (not for credit)

If S = P represents a country's home supply curve and D = 100 – P represents its home demand curve, then the equilibrium price and quantity in autarky are:

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01:220:300:01 INTERNATIONAL ECON Trade barriers practice questions (not for credit)

If S = P represents a country's home supply curve and D = 100 – P represents its home demand curve, then the equilibrium price and quantity in autarky are:

查看解析

登录即可查看完整答案

类似问题

Price decreases for a product are most likely to occur when

Assume that a competitive industry producing a normal good is in long-run equilibrium. If average consumer income decreases, which of the following changes will occur?

Which of the following describes how a market will respond when the scarcity of a good increases?

Assume that consumers consider popcorn and pretzels to be substitutes. A significant decrease in the supply of popcorn will affect the pretzel market by

In the coffee market, which of the following changes will increase the price and decrease the quantity of coffee?

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At an initial equilibrium, supply curve shifts to the left, demand curve remain unchanged. This creates ______________ and prices will _______________ restore the market equilibrium.

Due to the Covid-19 Pandemic, the demand for face masks and sanitizers have greatly increased which also increased the price for these products by 50%. Which of the following statements is true?

更多留学生实用工具

希望你的学习变得更简单

At an initial equilibrium, demand curve shifts to the left, supply curve remain unchanged. This creates and prices will _ restore the market equilibrium.

At an initial equilibrium, supply curve shifts to the left, demand curve remain unchanged. This creates and prices will _ restore the market equilibrium.