25 20 15 10 5 P a 0 3 O(c) areas (c) + (d) (d) areas (b) + (c) + (d) + (e) (e) areas (a) + (b) + (c) + (d) e 6 (D b S 9 12 15 18 21 25. If the free trade price is IP and this country imposes a trade tariff of $6, the loss to the economy as a result of this tariff is represented by O(a) area (a) in this graph (b) area (b) in this graph P* 24 -IP D

25 20 15 10 5 P a 0 3 O(c) areas (c) + (d) (d) areas (b) + (c) + (d) + (e) (e) areas (a) + (b) + (c) + (d) e 6 (D b S 9 12 15 18 21 25. If the free trade price is IP and this country imposes a trade tariff of $6, the loss to the economy as a result of this tariff is represented by O(a) area (a) in this graph (b) area (b) in this graph P* 24 -IP D

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 5CQQ

See similar textbooks

Similar questions

What are the conditions under which a country may use the unsafe products argument to block imports?
What is intra-industry trade?
Homework (Ch 09) Q Search th The following graph shows the domestic supply of and demand for maize in Panama. The world price (Pw) of maize is $270 per ton and is represented by the horizontal black line. Throughout the question, assume that the amount dermanded by any one country does not affect the world price of maize and that there are no transportation or transaction costs associated with international trade in maize. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Domestic Demand Domestic Supply 450 430 410 300 370 350 330 260 270 PRICE (Dollars per ton)
PRICE (Dollars per ton) 800 590 560 530 500 470 W 440 410 380 350 Domestic Demand 320 3 D 0 30 60 E Consumer Surplus Producer Surplus C 90 120 150 180 210 QUANTITY (Tons of melons) When Guatemala adjusts its trade policy to allow free trade of melons, the price of one ton of melons in Guatemala becomes $500. At this price, tons of melons will be demanded in Guatemala, and tons will be supplied by domestic suppliers. Therefore, Guatemala will export tons of melons. Using the information from the previous tasks, complete the following table to analyze the welfare effect of allowing free trade. With Free Trade (Dollars) Without Free Trade (Dollars) $ 4 When Guatemala allows free trade, the country's producer surplus by s R F Domestic Supply V 5 T P. G W 240 270 270 300 6 by s and consumer surplus Therefore, the net effect of allowing international trade on Guatemala's total surplus is a Y Consumer Surplus H Producer Surplus & 7 N U J * 8 M 1 ( 9 K O O L P of : ; { [ ?
Under open trade, what will be the international price and quantity traded? (a) $8 and 12 units. (b) $9 and 18 units. (c) $11 and 15 units. (d) $11 and 9 units.
07. Under open trade, (a) country 1 will be importing and country 2 exporting 12 units at a price of $10. (b) country 1 will be importing and country 2 exporting 9 units at a price of $11. (c) country 2 will be importing and country 1 exporting 15 units at a price of $11. (d) country 2 will be importing and country 1 exporting 9 units at a price of $14. (e) country 2 will be importing and country 1 exporting 9 units at a price of $11.
PRICE (Dollars per ton) 980 Domestic Demand 930 880 830 780 730 680 630 580 530 480 0 50 Domestic Supply Pw 100 150 200 250 300 350 400 450 500 QUANTITY (Tons of oranges) If Zambia is open to international trade in oranges without any restrictions, it will import A tariff set at this level would raise $ ? Suppose the Zambian government wants to reduce imports to exactly 200 tons of oranges to help domestic producers. A tariff of $ will achieve this. tons of oranges. in revenue for the Zambian government. per ton
Price $16 129 14 12 10 8 co 6 4 2 Sd 0 10 20 30 40 50 60 70 80 90 Quantity Dd Please refer to the graph provided, which displays the domestic supply (S) and demand (D) curves for a certain product. The world price of this product is $6. If this particular market is open to international trade, but there is a tariff of $6 per unit imposed, then the domestic producers will earn $240, the total revenue (after tariff) going to foreign producers would be $240, and the tariff revenue going to the government would be $40 $600, and there will be no imports and no tariff revenue. $120, the total revenue (after tariff) going to foreign producers would be $120, and the tariff revenue going to the government would be $80 O $400, the total revenue (after tariff) going to foreign producers would be $120, and the tariff revenue going to the government would be $40
Question Completion Status: 25 Sd 20 15 p* a bc IP 10 Dd 0 3 6. 12 15 18 21 24 18. If the free trade price is IP and this country imposes a trade tariff of $3, the loss to consumers as a result of the imposition of the tariff is represented by O (a) area (a) in this graph O (b) area (b) in this graph (c) areas (c) + d) (d) areas (b) + (c) + (d) (e) areas (a) + (b) + (c) + (d) 9.
Question 35 wer Suppose in an economy with a tariff on the import of sugar, if the domestic demand for sugar decreases, then which of the following is true? The figure is for reference. In the figure D₁ represents domestic demand, S₁ represents domestic supply, S2 represents supply with free trade, and S3 represents supply with tariff imposed. (c) Tariff-restricted trade D₁ S₁ PRICE (dollars per unit) ▬▬▬▬ C 0 qd qt 93 92 QUANTITY (units per year) The price paid by consumer will stay the same and import of sugar will increase. The price paid by consumers will increase and import of sugar will increase. The price paid by consumer will decrease and import of sugar will decrease. The price paid by consumers will stay the same and import of sugar will decrease. S₂
44 40 36 32 28 24 20 16 12 D. B C) D) 16 24 32 40 48 56 64 Quantity (millions of shirts per year) 2) of d The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. The United States imposes a tariff on imported shirts, $4 per shirt. By million shirts per year. 33) In the figure above, with the tariff Americans buy A) 16 C) 48 B) 32 D) 40 ac Price (dollars per shi
Quantify the effects of a country’s tariff on sugar Situation with import tariff Estimated situation without tariff World price $0.10per pound $0.10per pound Tariff $0.02per pound 0 Domestic price $0.12per pound $0.10per pound Domestic consumption (billions of pounds per year) 20 22 Domestic production (billions of pounds per year) 8 6 Imports (billions of pounds per year) 12 16 Calculate the following measures:• The domestic consumers’ gain from removing the tariff. • The domestic producers’ loss from removing the tariff. • The government tariff revenue loss.• The net effect on national well-being.