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2. Suppose the supply and demand curves for wheat are given by: S = 2P – 1 D = 5- P where P is the price of wheat per bushel, D is the quantity of wheat demand (in millions of bushels), and S is the quantity of wheat supply (in millions of bushels). Suppose the free trade price of wheat is $1.00 and that a tariff of $0.50 is being considered by the govermment. If the country is a small importer calculate the following: i. The value of the increase in producer surplus expected due to the tariff. The value of the decrease in consumer surplus expected due to the tariff. ii. ii. The value of the tariff revenue expected due to the tariff. The value of the change in national welfare expected due to the tariff. iv. Note: Partial credit is awarded only if you show your work.

2. Suppose the supply and demand curves for wheat are given by: S = 2P – 1 D = 5- P where P is the price of wheat per bushel, D is the quantity of wheat demand (in millions of bushels), and S is the quantity of wheat supply (in millions of bushels). Suppose the free trade price of wheat is $1.00 and that a tariff of $0.50 is being considered by the govermment. If the country is a small importer calculate the following: i. The value of the increase in producer surplus expected due to the tariff. The value of the decrease in consumer surplus expected due to the tariff. ii. ii. The value of the tariff revenue expected due to the tariff. The value of the change in national welfare expected due to the tariff. iv. Note: Partial credit is awarded only if you show your work.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please answer questions 2 and 3 please
**Image Transcription for Educational Website** --- **Table Analysis:** The table categorizes the impact of tariffs on chicken imports and export subsidies on soybeans, identifying which groups win or lose and whether the effects are concentrated or dispersed. - **Tariff on Chicken Imports:** - **Chicken Producers:** Winners - **Chicken Consumers:** Losers - **Taxpayers or Recipients of Government Benefits:** Undetermined - Concentrated or Dispersed: Undetermined - **Export Subsidy on Soybeans:** - **Soybean Producers:** Winners - **Soybean Consumers:** Losers - **Taxpayers or Recipients of Government Benefits:** Undetermined - Concentrated or Dispersed: Undetermined --- **Economic Problem Analysis:** 2. **Wheat Supply and Demand Calculation:** Given the supply and demand curves for wheat: - Supply curve: \( S = 2P - 1 \) - Demand curve: \( D = 5 - P \) Where \( P \) is the price of wheat per bushel, \( D \) is the quantity of wheat demand (in millions of bushels), and \( S \) is the quantity of wheat supply (in millions of bushels). Suppose the free trade price of wheat is $1.00, and a tariff of $0.50 is being considered by the government. **If the country is a small importer, calculate the following:** i. The value of the increase in producer surplus expected due to the tariff. ii. The value of the decrease in consumer surplus expected due to the tariff. iii. The value of the tariff revenue expected due to the tariff. iv. The value of the change in national welfare expected due to the tariff. **Note:** Partial credit is awarded only if you show your work. 3. **Discussion of Trade Conditions:** Discuss at least two conditions under which preferential trading arrangements will most likely lead to trade creation and increased welfare of member nations. ---
Transcribed Image Text:**Image Transcription for Educational Website** --- **Table Analysis:** The table categorizes the impact of tariffs on chicken imports and export subsidies on soybeans, identifying which groups win or lose and whether the effects are concentrated or dispersed. - **Tariff on Chicken Imports:** - **Chicken Producers:** Winners - **Chicken Consumers:** Losers - **Taxpayers or Recipients of Government Benefits:** Undetermined - Concentrated or Dispersed: Undetermined - **Export Subsidy on Soybeans:** - **Soybean Producers:** Winners - **Soybean Consumers:** Losers - **Taxpayers or Recipients of Government Benefits:** Undetermined - Concentrated or Dispersed: Undetermined --- **Economic Problem Analysis:** 2. **Wheat Supply and Demand Calculation:** Given the supply and demand curves for wheat: - Supply curve: \( S = 2P - 1 \) - Demand curve: \( D = 5 - P \) Where \( P \) is the price of wheat per bushel, \( D \) is the quantity of wheat demand (in millions of bushels), and \( S \) is the quantity of wheat supply (in millions of bushels). Suppose the free trade price of wheat is $1.00, and a tariff of $0.50 is being considered by the government. **If the country is a small importer, calculate the following:** i. The value of the increase in producer surplus expected due to the tariff. ii. The value of the decrease in consumer surplus expected due to the tariff. iii. The value of the tariff revenue expected due to the tariff. iv. The value of the change in national welfare expected due to the tariff. **Note:** Partial credit is awarded only if you show your work. 3. **Discussion of Trade Conditions:** Discuss at least two conditions under which preferential trading arrangements will most likely lead to trade creation and increased welfare of member nations. ---
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