2 Who benefits from exports The following calculators show t

2. Who benefits from exports? The following calculators show the Republic of the Union of Myanmar\'s (also known as Burma) domestic demand and domestic supply curves. Use the calculators to answer the questions that follow. You will not be graded on any changes you make to the calculator. Tool tip: Use your mouse to drag the green line on the graph. The values in the boxes on the right side of the calculator will change accordingly. You can also directly change the values in the boxes with the white background by clicking in the box and typing. When you click the Calculate button, the graph and any related values will change accordingly. CALCULATOR PRICE [Dollars per tonl 300 Price Dollars per ton 100 250 Quantity Demanded 26 Quantity Supplied 13 Millions of tons of rice [Millions of tons of rice] Exports [Millions of tons of rice 200 150t 100 50 40 50 QUANTITY (Millions of tons of ricel 10 20 30

Solution

1) $ 125

2) At price of $ 200, domestic demand is 10 million units while domestic supply is 40 million units.

So, Exports = 40 - 10 = 30 million units

3) Producers because price is greater than equilibrium price

4) $ 182 per ton will be the new price because at each price quantity demanded increases by 20 million tons. This causes rightward shift of demand curve by 20 million to the right and leads to new equilibrium price of $ 182.

5) Profit = TR - TC = PQ - 20 million x 152 = 200 x 20 million - 182 x 20 million

= 20 million (200 - 182) = 20 million x 18 = 360 million