Kingston Technology, an American company, manufactures 24 thousand 4GB RAM sticks for the domestic market at the price of $18 for each stick. After a trade agreement between the US and China, the company started to export some of its sticks to China
Kingston Technology, an American company, manufactures 24 thousand 4GB RAM sticks for the domestic market at the price of $18 for each stick. After a trade agreement between the US and China, the company started to export some of its sticks to China. Production increased by an additional 4 thousand sticks and Kingston raised the price of each stick to $21 while domestic demand was reduced by 6 thousand sticks as a result. a. Identify the supply and demand function curve for 4GB RAM sticks. (2pt) b. After a certain time, China has been accused of foul play. Kingston strongly believed its partner in China engaged in Intellectual Property theft to undercut competition and demanded the U.S. government take action. Export subsidies for Kingston were quick to be provided to ensure fair competition. With a new influx of funding, the new production of RAM sticks rose to 36 thousand sticks. Determine the value of the consumption effect, production effect, trade effect, and subsidy value. (2pt) c. Calculate the deadweight loss of subsidy. (3pt) d. Is U.S. government interference in free trade justified in this case? Provide a brief argument (no more than 150 words)
3
) Kingston Technology, an American company, manufactures 24 thousand 4GB RAM sticks for the domestic market at the price of $18 for each stick. After a trade agreement between the US and China, the company started to export some of its sticks to Chin
Kingston Technology, an American company, manufactures 24 thousand 4GB RAM sticks for the domestic market at the price of $18 for each stick. After a trade agreement between the US and China, the company started to export some of its sticks to China. Production increased by an additional 4 thousand sticks and Kingston raised the price of each stick to $21 while domestic demand was reduced by 6 thousand sticks as a result. a. Identify the supply and demand function curve for 4GB RAM sticks. (2pt) b. After a certain time, China has been accused of foul play. Kingston strongly believed its partner in China engaged in Intellectual Property theft to undercut competition and demanded the U.S. government take action. Export subsidies for Kingston were quick to be provided to ensure fair competition. With a new influx of funding, the new production of RAM sticks rose to 36 thousand sticks. Determine the value of the consumption effect, production effect, trade effect, and subsidy value. (2pt) c. Calculate the deadweight loss of subsidy. (3pt) d. Is U.S. government interference in free trade justified in this case? Provide a brief argument (no more than 150 words)
1
International Economic Law