Question: Kawmin is a small country that produces and consumes jelly beans. The world price of jelly beans is $2 per bag, and Kawmin’s domestic demand and supply for jelly beans are governed by the following equations:

𝐷em𝑎𝑛𝑑: 𝑄𝐷=24−3𝑃 𝑎𝑛𝑑 𝑆𝑢𝑝𝑝𝑙𝑦: 𝑄𝑆=𝑃

1. Draw a well labeled graph of the situation in Kawmin if the nation does not allow for trade. Calculate the following: the equilibrium price and quantity, consumer surplus, producer surplus, and total surplus .
2. Kwamin then opens the market to trade. Draw another graph to describe the new situation in the jelly bean market. Calculate equilibrium price, quantities of consumption and production, imports, consumer surplus, producer surplus, and total surplus .
3. After a while, a $1 per bag tariff is placed on jelly bean imports. On the same graph in part (b), show the effects of this tariff. Calculate the equilibrium price, quantities of consumption and production, imports, consumer surplus, producer surplus, government revenue, and total surplus .

Price: $2.99

Solution: The downloadable solution consists of 4 pages
Deliverable: Word Document