23. What happens to the relative price of a good as a result of trade if there is an increasing return to scale in the industry producing the good. Is it still converging to a price between domestic and foreign price of the good? Draw a graph to answer.

23. What happens to the relative price of a good as a result of trade if there is an increasing return to scale in the industry producing the good. Is it still converging to a price between domestic and foreign price of the good? Draw a graph to answer.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Economic Use the graph below and the following information to answer the next question. The world price of soybeans is five dollars per bushel and the importing country is small enough to not affect the real price. Suppose the government puts a tariff of one dollars per bushel on soybean imports how much revenue will the government raise from a one dollar per bushel tariff on soybean imports.
If the United States is currently importing 14 million barrels per day at a world price of $4.00 per unit (the entire amount consumed), what is the effect on imports of a tax equal to $4.00 per unit? 1.) Using the line drawing tool, help determine the quantity of U.S. crude oil imports after the $4.00 per-unit tax by drawing a horizontal line at the price paid by U.S. consumers. Label this line + Tax'. 2.) Using the point drawing tool, determine quantity demanded at the price paid by U.S. consumers after the imposition of the import tax. Label this line 'Pop'. 3.) Using the point drawing tool, determine quantity supplied at the price paid by U.S. consumers after the imposition of the import tax. Label this line "Pas". Carefully follow the instructions above and only draw the required objects. The amount of imports after the $4.00 per-unit tax is million barrels per day. Before the tax, domestic producers supplied 0 barrels of crude oil. They now supply million barrels Price per barrel…
х 0 150 $1500 $625 $2800 $865 Price of Calculators $27 12 7 2 300 400 Domestic Supply Domestic Demand World Price Quantity of Calculators The figure above shows the domestic market for calculators in Haiti. What is the change in total surplus in Haiti because of trade?
4. Tariffs Suppose Kenya is open to free trade in the world market for wheat. Because of Kenya's small size, the demand for and supply of wheat in Kenya do not affect the world price. The following graph shows the domestic wheat market in Kenya. The world price of wheat is Pw =$250 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). 490 Domestic Demand Domestic Supply 460 CS 430 400 370 PS 340 310 280 250 220 190 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of tons of wheat) If Kenya allows international trade in the market for wheat, it will import tons of wheat. Now suppose the Kenyan government decides to impose a tariff of $60 on each imported ton of wheat. After the tariff, the price Kenyan consumers pay for a ton of wheat is $ and Kenya will import tons…
Because Zambia participates in international trade in the market for soybeans, it will import tons of soybeans. Now suppose the Zambian government decides to impose a tariff of $10 on each imported ton of soybeans. Under the tariff, the price Zambian consumers pay for a ton of soybeans becomes , and Zambia will import tons of soybeans. Use the following graph to show the effects of the $10 tariff
[India is the world’s largest consumer of sugar. Assume the world price for sugar is $750 per ton.] [Assume India currently has a tariff of $50 per ton on sugar and imports 7 million tons of sugar. Show this situation in a graph. Label the quantity demanded and the quantity supplied domestically and imports clearly on a graph. Explain your graph in 3-4 sentences. How to draw the graph?
!
If a country removes a tariff on imported shoes, we expect the domestic price of shoes to and the number of shoes consumed in the domestic market to a. fall; fall b. fall; rise c. rise; fall d. rise: rise
Consider a small country that exports good Z. Some of the total quantity of Z that is domestically produced is consumed by domestic consumers and the rest of it is exported. Then suppose that the government imposed a ban (a prohibition) on Z being exported. Show the effects of this export ban using a carefully labelled demand and supply diagram. On your diagram, shade-in the area that represent the deadweight loss caused by the export ban (please do not shade-in any other areas) and explain your reasoning.
Question 7 Consider again this same graph: Price 40 8 7 6 5 4 3 2 0 Tariff Domestic supply Domestic demand 10 20 30 40 50 60 70 80 World price Quantity Tell me the amount of gains from trade, carefully following all numeric instructions.
2 Using the graph, assume that the government imposes a $1 tariff on solar panels. Answer the following questions given this information. Price $13 65 8 Domestic Supply $1.00 Tariff World Price Domestic Demand о 30 40 60 84 96 Quantity a. What is the domestic price and quantity demanded of solar panels after the tariff is imposed? b. What is the quantity of solar panels imported before the tariff? c. What is the quantity of solar panels imported after the tariff? d. What would be the amount of consumer surplus before the tariff? e. What would be the amount of consumer surplus after the tariff? f. What would be the amount of producer surplus before the tariff? g. What would be the amount of producer surplus after the tariff? h. What would be the amount of government revenue because of the tariff? i. What would be the total amount of deadweight loss due to the tariff?
The box said higher or lower for the 1 question an OA. win: lose OB. lose: win OC. lose: lose OD. win: win The United States exports athletic coaching services and imports coffee. The price of athletic coaching services in the United States is without international trade. As a result of trade in athletic coaching services, U.S. producers of athletic coaching services and U.S. consumers of athletic coaching services Click to select your answer. Show Transcribed Text The box said higher or lower for the 1 question 5 OA win; lose OB. lose; win OC. win: win OD. lose; lose C 3 C The price of coffee in the United States is trade. As a result of trade in coffee, the U.S. producers of coffee with international trade than with international trade than without international and U.S. consumers of coffee T tri A