BU224M1 Market Interactions Discussion

BU224M1 Market Interactions Discussion
This competency assessment assesses the following Outcomes:
BU224M1-1: Examine how various supply and demand scenarios affect the way prices and quantities are set by market interactions in perfectly competitive markets.
GEL-1.02: Demonstrate college-level communication through the composition of original materials in Standard English.
PC-4.1: Assess the value of multiculturalism and diversity in a global environment.
BU224M1 Market Interactions Discussion
Directions:
In this assessment, you will apply your understanding of comparative advantage as a foundation for trade, along with your understanding of the crucial concept of changes in supply and demand equilibrium. You will also provide a rational approach on how cultural differences and the downfalls of stereotyping people from foreign cultures and misunderstanding their cultural attitudes affect international trade. This assessment requires you to use the Microsoft® Word® template provided to compose a combination of short paragraph answers, computations, and completion of a 450–500-word expository research paper.
Questions
1. Suppose that the supply schedule of Brazilian coffee beans is as follows:
Table 1
Price of Brazilian coffee beans
(per pound)
S
BU224M1 Market Interactions Discussion
Quantity of Brazilian coffee beans supplied
(pounds)
$4.00
6,000
$3.50
5,000
$3.00
4,000
$2.50
3,000
$2.00
2,000
Suppose that Brazilian coffee beans can be sold only in Brazil. The domestic Brazilian demand schedule for Brazilian coffee beans is as follows
Table 2
Price of Brazilian coffee beans
(per pound)
DB
Brazilian quantity of Brazilian coffee beans demanded (pounds)
$4.00
1,000
$3.50
2,500
$3.00
4,000
$2.50
5,000
$2.00
7,000
a. From the supply and demand schedules above, what are the equilibrium price and quantity of Brazilian coffee beans?
BU224M1 Market Interactions Discussion
Now suppose that Brazilian coffee beans can also be sold in Canada. The Canadian demand schedule for Brazilian coffee beans is shown in Table 3.
Table 3
Price of Brazilian coffee beans
(per pound)
DC
Canadian quantity of Brazilian coffee
beans demanded
(pounds)
$4.00
1,000
$3.50
2,500
$3.00
3,000
$2.50
5,000
$2.00
5,500
b. Complete column DC DB total combined Canadian and Brazilian coffee beans demanded of Table 4, by inserting the correct values, computed from information contained in Tables 2 and 3, at each price.
Table 4