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__________ has the comparative advantage in Potions and ___________ has the comparative advantage in Spells.

Consider two markets, the market for AI Chips and the market for Lithium batteries. Suppose the equilibrium price of AI chips is $12 and the equilibrium price for batteries is $3. If the government places a $6 price ceiling on both markets:

Refer to the diagram below for questions 11-18.   Suppose that the market is currently unregulated and in equilibrium.

Someone made the observation that when income increases by 11%, the quantity demanded of tablets increases by 15%. If this is indeed true, this means that:

Suppose that at the same time that Malta begins trading with the rest of the world, a tariff of $2 per pencil is imposed on import in Malta. The total tariff revenue collected will equal:

What is the change in the amount of total surplus when the government intervenes with the policy that gets the market quantity to be the same as the socially efficient quantity?

What is consumer surplus in this market?

Suppose now that instead of the tax, a price floor of $6 is imposed in the market.

Consider that a new technology is developed that makes the AI chips production twice as efficient. AI chips are used to produce computers. What will be the effect to the equilibrium quantity and price of computers?

Two things happen: 1) A technology is developed that makes the AI chips production twice as efficient and 2) the same shock as in question 1 where consumers are afraid they will not have enough AI chips in the near future.