Examine how various supply and demand scenarios affect the way prices and quantities are set by market interactions in perfectly competitive markets.
finance
Description
This competency assessment assesses the following Outcomes:
BU224M1-1: Examine how various
supply and demand scenarios affect the way prices and quantities are set by
market interactions in perfectly competitive markets.
GEL-1.02: Demonstrate college-level communication through the
composition of original materials in Standard English.
PC-4.1: Assess the value of multiculturalism and diversity in a
global environment.
Directions:
In this assessment, you will apply your understanding of comparative advantage
as a foundation for trade, along with your understanding of the crucial concept
of changes in supply and demand equilibrium. You will also provide a rational
approach on how cultural differences and the downfalls of stereotyping people
from foreign cultures and misunderstanding their cultural attitudes affect
international trade. This assessment requires you to use the Microsoft® Word®
template provided to compose a combination of short paragraph answers,
computations, and completion of a 450–500-word expository research paper.
Questions
1. Suppose that the supply schedule of Brazilian coffee beans is as follows:
Table 1
|
|
S |
|
$4.00 |
6,000 |
|
$3.50 |
5,000 |
|
$3.00 |
4,000 |
|
$2.50 |
3,000 |
|
$2.00 |
2,000 |
Suppose that Brazilian coffee beans can be sold only in Brazil. The domestic
Brazilian demand schedule for Brazilian coffee beans is as follows
Table 2
|
|
DB |
|
$4.00 |
1,000 |
|
$3.50 |
2,500 |
|
$3.00 |
4,000 |
|
$2.50 |
5,000 |
|
$2.00 |
7,000 |
a.
From the supply and demand schedules above, what are
the equilibrium price and quantity of Brazilian coffee beans?
Now suppose that Brazilian coffee beans can also be sold in
Canada. The Canadian demand schedule for Brazilian coffee beans is shown in
Table 3.
Table 3
|
|
DC |
|
$4.00 |
1,000 |
|
$3.50 |
2,500 |
|
$3.00 |
3,000 |
|
$2.50 |
5,000 |
|
$2.00 |
5,500 |
b.
Complete column DC+DB total
combined Canadian and Brazilian coffee beans demanded of
Table 4, by inserting the correct values, computed from information contained
in Tables 2 and 3, at each price.
Table 4
