6. The arguments for restricting trade Suppose there is a policy proposal to increase trade restrictions on imported microprocessors to the United States. Read the following scenario and answer the question that follows. A congresswoman from a state with several microprocessor factories argues that the government should impose a tariff on microprocessors because they are a necessary input into the production of various weapons. Free trade, she contends, would make the United States overly dependent on foreign countries for the supply of microprocessors and thus, in case of war, unable to make enough weapons to defend itself. Which of the following justifications is the congresswoman using to support their argument in favor of the trade restriction on microprocessors? OUsing-protection-as-a-bargaining-chip argument O National-security argument O Jobs argument O Unfair-competition argument Infant-industry argument

6. The arguments for restricting trade Suppose there is a policy proposal to increase trade restrictions on imported microprocessors to the United States. Read the following scenario and answer the question that follows. A congresswoman from a state with several microprocessor factories argues that the government should impose a tariff on microprocessors because they are a necessary input into the production of various weapons. Free trade, she contends, would make the United States overly dependent on foreign countries for the supply of microprocessors and thus, in case of war, unable to make enough weapons to defend itself. Which of the following justifications is the congresswoman using to support their argument in favor of the trade restriction on microprocessors? OUsing-protection-as-a-bargaining-chip argument O National-security argument O Jobs argument O Unfair-competition argument Infant-industry argument

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Evaluate this statement: “If the United States imposed a uniform excise tariff on all foreign imports, all U.S. businesses and workers would benefit. Consequently, if a bill to impose a uniform excise tariff were introduced in the U.S. Congress, it would unanimously pass.”
a. Consider a closed economy (an autarky). The equilibrium price of computers in this autarky is equal to $1,000. Suppose that the world price of computers is equal to $800. Does this country have comparative advantage in producing computers? If this autarky opens up to international trade, will this country export or import computers? b. Show the consumer surplus, producer surplus, equilibrium price and quantity traded for the closed economy in part-a in the market for computers.
Suppose there are three countries, the EU, Mexico, and Asia, in the world and the EU imports electronics from either Mexico or Asia (or both). Assume that Mexico is a small supplier and Asia is a large supplier and the free-trade prices of electronics from Mexico and Asia are PMEXICO=$1,200 and PASIA=$1,000, respectively, and the EU initially imposes a 15% tariff on both Mexico and Asia. Now the EU forms an FTA with Mexico. Use a graph of import demand and export supply curves to show the impact of this FTA on EU’s consumer surplus, government revenue, and welfare. Is the EU better off or worse off with the FTA? In the above graph, identify the effect of the FTA on Mexico’s producer surplus. Suppose after the FTA with the EU, Mexico invests in its electronics industry and lowers its marginal cost such that its free-trade price is PMEXICO=$1,100. How would the graph and the answer in parts (a) and (b) change?
2. Welfare effects of a tariff in a small country Suppose Guatemala is open to free trade in the world market for oranges. Since Guatemala is small relative to the international market, the demand for and supply of oranges in Guatemala have no impact on the world price. The following graph shows the domestic market for oranges in Guatemala. The world price of a ton of oranges is Pw = $350. 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). PRICE (Dollars per ton) 710 Domestic Demand Domestic Supply 670 630 590 550 510 470 430 28 8 8 8 8 8 8 8 390 350 P. 310 0 15 30 45 60 75 90 105 120 135 150 QUANTITY (Tons of oranges) CS PS Because Guatemala participates in international trade in the market for oranges, it will import tons of oranges. Now suppose the Guatemalan…
A C Inflation rate, Inflation Inflation T 4.5 4 Chart D 3.5 3 2.5 2 1 2 Select one or more: O Chart A Chart B Chart C 3 4 5 6 VPC 7 8 PC = π¹ 9 MR Output, Y B Inflation Inflation 11 10 Time period Figure 14 Policy response to a positive demand shock 13 15 17 12 14 16 18 19 4.5 20 4 3.5 3 2.5 2 2 3 19 4 5 7 9 11 13 15 17 8 10 12 14 16 18 20 Time period 6 D Inflation VPC 76 rate, Figure 14 shows four charts labelled A to D depicting aspects of a positive permanent demand shock. Charts B and C are from the DD209 macrosimulator, while Charts A and D show MR curves. Which two of these charts are consistent with the policy response from a central bank that has a strong inflation aversion? (Choose two answers.) MR PC = n¹ Output, Y
3. Welfare effects of a tariff in a small country Suppose Ronduras is open to free trade in the world market for soybeans. Because of Honduras's small size, the demand for and supply of soybeans in Honduras do not affect the world price. The following graph shows the domestic soybeans market in Honduras. The world price of soybeans is Pw = $400 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). 1200 Domestic Demand Domestic Supply 1100 CS 1000 900 PS 800 700 600 500 400 300 200 100 120 140 160 180 200 20 40 60 80 QUANTITY (Tons of soybeans) PRICE (Dollars pe: ton)
Topic 3 Assignment The following graph shows the domestic supply of and demand for maize in Bangladesh. Bangladesh is open to international trade of maize without any restrictions. The world price (Pw) of maize is $245 per ton and is represented by the horizontal black line. Throughout this problem, assume that the amount demanded 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. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. 470 Supply 420 305 X I I Demand I PRICE (Dollars perton) 445 245 720 D P W 40 80 120 150 200 240 280 320 350…
Economics Question
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
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Carefully explain how the imposition of a tariff is different for a large country (that can affect the world price) than a small country. Show your work graphically and explain in words.
Consider the following model of trade between Home and Foreign. Assume throughout that those two countries are the only two countries in the world, at least for purposes of trade. There are two goods: Corn and Radio. Consumers always spend one-third of their income on Corn and the remainder on Radios. The only factor of production is labour. Each home country worker can produce 2 units of Corn or 3 units of Radios per unit of time, while each foreign worker can produce 2 units of Corn or 4 units of Radios per unit of time. There are 30 workers in Home and 60 workers in Foreign. Which country has a comparative advantage in Radios? In Corn?