18. Following up on questions 16-17: As a result of the importation of Mexican tomatoes described in question 2, consume

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18 Following Up On Questions 16 17 As A Result Of The Importation Of Mexican Tomatoes Described In Question 2 Consume 1 (25.57 KiB) Viewed 38 times

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18 Following Up On Questions 16 17 As A Result Of The Importation Of Mexican Tomatoes Described In Question 2 Consume 2 (87.03 KiB) Viewed 38 times

18. Following up on questions 16-17: As a result of the importation of Mexican tomatoes described in question 2, consumer surplus will: a) increase by 100. b) decrease by 100. c) increase by 156.25. d) remain unchanged. e) fall to zero because all social welfare will go to tomato producers.
16. In the U.S., the market demand and supply curves for tomatoes based strictly on domestic production and consumption are given by the following equations: Demand: Q = 200 - 50P Supply: Q=-50 + 50P If the market is perfectly competitive and unregulated, the equilibrium price of tomatoes (P*) and the quantity of tomatoes (Q*) purchased in this market will be: a) p*=1.50, Q*=125. b) p*=2.00, Q*=100. c) p*=2.50, Q*=75. d) P*=3.00, Q*=50. e) indeterminate. 17. Following up on question 16: Suppose the U.S. begins importing tomatoes from Mexico. Specifically, after buying all the domestic tomatoes that are available at a "world price” of $1.50/unit, the U.S. market faces an infinitely elastic supply of imported tomatoes (at P=1.50). As a result of the availability of imported tomatoes: a) U.S. consumers will pay two different prices for their tomatoes. b) U.S. consumers will consume fewer tomatoes than they would without imports. c) Q=125 tomatoes will be imported. d) Q=100 tomatoes will be imported. e) no domestic tomatoes will be consumed.