The Following Equations Represent a Small Country's Home Supply and Demand

Essay

The following equations represent a small country's home supply and demand curves for widgets: S = 0 + 2P and D = 1,000 - 2P.
I. Find the equilibrium price and quantity for widgets in autarky.
II. Now let the world price be $200. Find domestic production, domestic consumption, and the amount of imports.
III. Derive the country's import demand curve for widgets.
IV. Let the country impose a 10% tariff. Calculate its deadweight losses.