2. Uganda is a small of Uganda country. Thegovernment wants to protect domesticproducers of rice by imposing a quota, anad valorem tariff or an equivalent specifictariff. The three trade barriers would beequivalent in the sense that either one willinitially limit imports to a given amount. Onceeither of these measures is imposed, thegovernment will not switch to a differentmeasure or change its magnitude. Suppose theworld supply of rice (relative to the worlddemand for rice) is expected to increase in thefuture. You are a lobbyist for producers of rice inUganda and you only care about their interests.Which trade barrier would you advocate on theirbehalf - a quota, an ad valorem tariff, or a specifictariff? Which one would you advocate next?Explain carefully using a numerical example. (Feelfree to use a graph as well if you want.)(Consider ONLY the interests ofPRODUCERS of rice in Uganda.)

Ad valorem tariffs are a sort of import tax that are calculated as a percentage of the imports'…

2. Uganda is a small of Uganda country. The government wants to protect domestic producers of rice by imposing a quota, an ad valorem tariff or an equivalent specific tariff. The three trade barriers would be equivalent in the sense that either one will initially limit imports to a given amount. Once either of these measures is imposed, the

2. Uganda is a small of Uganda country. The government wants to protect domestic producers of rice by imposing a quota, an ad valorem tariff or an equivalent specific tariff. The three trade barriers would be equivalent in the sense that either one will initially limit imports to a given amount. Once either of these measures is imposed, the

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 1CQQ

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7. Country A has a tariff on imported TVs. But,the new government of Country A decided tocharge only half the tariffs against TVs fromcountry B, but keep the full tariff against TVsfrom countries C, D, and E. What would be theimpact on______O.A. The price of TVs in CountryAO.B.Quantity of domestic supply in Country AO.C. Quantity of imports in Country AO.D. Quantity of TVS exported by Country BO.E. Quantity of TVs exported by Countries C, D,and E
5. You have been asked to quantify the effects of removing a country's tariff on sugar. The ompute its value? nard part of the work is already done: Somebody has estimated how many pouncs Sugar would be produced, consumed, and imported by the country if there were no saber duty. You are given the information shown in the table. Estimated Situation without Tariff Situation with Import Tariff World price $0.10 per pound $0.10 per pound $0.02 per pound $0.12 per pound Tariff $0.10 per pound Domestic price Domestic consumption (billions of pounds per year) Domestic production (billions of pounds per year) Imports (billions of pounds per year) 22 20 8. 16 12 Calculate the following measures: a. The domestic consumers' gain from removing the tariff. b. The domestic producers' loss from removing the tariff. C. The government tariff revenue loss. d. The net effect on national well-being.
Suppose that Congress imposes a tariff on importedautomobiles to protect the U.S. auto industry fromforeign competition. Assuming that the United Statesis a price taker in the world auto market, show thefollowing on a diagram: the change in the quantityof imports, the loss to U.S. consumers, the gainto U.S. manufacturers, government revenue, andthe deadweight loss associated with the tariff. Theloss to consumers can be decomposed into threepieces: a gain to domestic producers, revenue forthe government, and a deadweight loss. Use yourdiagram to identify these three pieces.
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