3. Suppose that initially the U.S. textile market is not open to trade. When they do not trade, the marketprice of textiles is $10/unit, and the equilibrium quantity is 200 units.(a) Illustrate the market for textiles in the U.S. Be sure to label the market price and the equilibriumquantity. Label consumer surplus and producer surplus.(b) Now suppose the U.S. opens up to trade in textiles. Furthermore, suppose the world price of textilesis $12/unit. Will the U.S. become an importer or an exporter of automobiles? Explain.(c) Illustrate the situation from part B in a graph. Be sure to label the world price and imports or exports.Label consumer surplus and producer surplus.(d) After opening up to trade in textiles, who is better off (consumers or producers) and who is worse off(consumers or producers)? Explain your answer using the concepts of consumer surplus and producersurplus.(e) Is the U.S. economy overall better off or worse off (or neither) after opening up to trade in textiles?Explain.

Let's create the graphs to visually represent these concepts. I'll use Python to generate these…

Answered: 3. Suppose that initially the U.S.…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The U.S. is an importer of ethanol, and let’s assume they are a price-taker in the world market. Suppose that a technological advance in ethanol production in Brazil, the world’s largest exporter, drives down the world price of ethanol by $5. Draw a graph and explain how this change in world price affects consumer surplus, producer surplus, and total surplus in the U.S. market. Now suppose the U.S. government institutes an import tariff of $5 in response to the fall in the world price. On your graph label the revenue raised by the tariff and the deadweight loss created (if it exists). Who is likely to support this policy? Suppose that the fall in price is attributable not to a technological advance but to a subsidy from the Brazilian government to Brazilian ethanol producers. How would this affect your analysis?
7. For many years, various groups have accused China of "dumping" exports onto the US market. That is, they claim that the Chinese government subsidizes Chinese exporting firms to allow them to sell at lower prices than US firms and/or lower than sellers from other countries. Some trade policy analysts argue that the US is harmed by this dumping behavior and that the US should impose restrictions on imports from China. Use a supply and demand diagram to assess this argument. Do you agree with the argument made and policy prescribed by the trade analysts?
Question 2: Suppose Qd= 100- 10P Qs = 10P a. Draw a graph using the supply and demand equation assuming no trade. Calculateequilibrium P, Q, consumer, producer and total surplus. b. Draw another graph assuming that trade is allowed. Calculate quantity domesticallyconsumed, domestically produced, imports, consumer surplus, producer surplus assumingworld price =$3. c. What happens to consumer surplus and producer surplus after trade? Does total surplusincrease or decrease after trade? Show your calculations. i need the the diagram
7. What would happen to world welfare if the United States paid exporters a subsidy of $5 for every pair of blue jeans they sold to Canada, but Canada charged a $5 countervailing duty on every pair imported into Canada? Would the United States gain from the combi- nation of the export subsidy and import tariff? Would Canada? Explain. (In your answer, assume that the blue jeans market is perfectly competitive.) 8. Consider the case
You are provided with the following information about the Canadian turkey market:1. The world price of turkey is $5.2. The Canadian turkey market is currently (before the new trade agreement) protected by a tariffrate quota (TRQ) of the following format:a) the in-quota tariff is $1 per unitb) the import quota volume is 100 unitsc) the over-quota tariff is $10 per unit.3. An excess demand (ED) (for imports) function for turkey has been estimated as? = 28 − 0.14?. Notes: Canada is a small importing country in the world market for turkeys. Answer the question below: The Canadian government is considering reducing the in-quota tariff to $0.50. Modify the diagram for this market, and solve for the Canadian turkey price and the volume of imports. Label all relevant functions, axes, etc.
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…
3
46. Chapter mank071, Section .61, Problem 024 8. $30. OC. $90. OD. $110. Ask me anything 5 8 8 8 8 8 8 8 8 8 8 8888 8 150- 140- 130+ 120- 110- 100+ 30 Price 10+ B Figure 9-1 The figure illustrates the market for coffee in Guatemala. Refer to Figure 9-1. In the absence of trade, the equilibrium price of coffee in Guatemala is OA. $140. C C (2 2 4 6 8 10 12 14 16 18 20 B 8 D F 24 8. $8. 8 S I H 8 ·88 8. 5. Domestic supply World price Domestic demand 3 46 48 50 52 Quantity
2.2 Evaluate the economic effect in the free market of a country for a good if its government imposes a maximum price for the good that lies below its equilibrium price.
Consider the market below for a large country. Focus on the equilibrium when the country imposes a tariff. How large is the tariff? Price $25 $20 $15 10 20 30 40 Quantity Select one: O a. $20 O b. $25 O c. $10 O d. $15
During the first 6 months of 2008, the United States imported from Africa, Asia, and Latin America more than 1.6 billion pounds of coffee and did not export any coffee. How is the gain from imports distributed between consumers and domestic producers? A. U.S. producer surplus shrinks. B. U.S. consumer surplus increases. C. Total U.S. surplus increases. D. All the above answers are correct.
B3

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