7. What happens to the domestic market when suppliers start to gain comparative advantage and export cars. Who enjoys the economic surplus and who lose their share of the surplus?
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- Answer the question using 3 step approach 8. What happens to the domestic market when the government allows the importation of more units of rice but with a tariff?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?4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of limes in Guatemala. The world price (Pw) of limes is $790 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of limes and that there are no transportation or transaction costs associated with international trade in limes. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. PRICE (Dollars per ton) 1110 1070 1030 990 950 910 870 830 790 750 710 0 Domestic Demand 40 25 1 1 80 Domestic Supply 120 160 200 240 280 QUANTITY (Tons of limes) I 1 Pw 320 380 400 (?)
- Economics When a new tariff is placed on imported furniture, which of the following is expected to happen in the domestic market for furniture, all else being equal? a.Consumer surplus and producer surplus both increase. b.Consumer surplus decreases and producer surplus increases. c.Consumer surplus and producer surplus both decrease. d.Consumer surplus increases and producer surplus decreases.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. Assume that supply for replacement mobile phone batteries in the Australian domestic market is given by the inverse-supply expression P = 9+0.000010s, while inverse demand is P = 19 -0.00001QD. The world price for batteries is $10. (a) Find the equilibrium price and quantity in the market for replacement mo- bile phone batteries if Australia does not engage in any international trade. Compute the consumer surplus, the producer surplus, and the total surplus in the market. (b) Now assume that Australia trades on the world market for batteries, exporting or importing batteries depending on the relation between the world and domestic prices. Find the price at which batteries will be sold in Australia, the quantity purchased, the quantity produced, and the quantity of imports or exports. Compute the consumer surplus, the producer surplus, and the total surplus in the market, as well as the gains from trade relative to part (a). (c) The Australian government imposes a $2 tariff on the…
- 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…[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?4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of oranges in Honduras. The world price (Pw) of oranges is $535 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with international trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Domestic Demand 775 735 X 695 655 615 535 + 895 PRICE (Dollars per ton) 855 815 575 495 Domestic Supply 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Tons of oranges) PW A tariff set at this level would raise ? If Honduras is open to international trade in oranges without any restrictions, it will import Suppose the Honduran government wants to reduce…
- Consider the market for coffee in the small, isolated country of Krakozhia. Within Krakozhia, the domestic demand for coffee is: Q = 500-2p and the domestic supply of coffee is: Q* = -150+ 3pLesson 12 Question 1help 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