8. Removing an import quota on sugar could possibly hurt US welfare iff a) the US price of sugar falls b) the volume of US sugar imports rises c) quota rights were bring given away for free d) quota rights were being auctioned off efficiently e) none of the above
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![Chapter 9 Trade Policy
8. Removing an import quota on sugar could possibly hurt US welfare iff
a) the US price of sugar falls
b) the volume of US sugar imports rises
c) quota rights were bring given away for free
d) quota rights were being auctioned off efficiently
e) none of the above](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F89334573-8ad5-4e81-b014-fdfd29bae38c%2F4ad7e591-5106-4c8e-accb-b27d66661343%2Fhtjnpsh_processed.jpeg&w=3840&q=75)
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- 00 7 F. PRICE (Dollars per ton) 4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for soybeans in Honduras. The world price (Pw) of soybeans is $530 per ton and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of soybeans and that there are no transportation or transaction costs associated with international trade in soybeans. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 2. Domestic Demand Domestic Supply 770 740 710 680 650 620 06 P, 530 MacBook Pro Search or type URL 4. 51 9.4. Imports and Market Supply. Two nations supply sugar to the world market. Lowland has a minimum supply price of 10 cents per pound, while Highland has a minimum supply price of 24 cents per pound. For each nation, the slope of the supply curve is 1 cent per million pounds. a) Draw the individual supply curves and the market supply curve. At what price and quantity is the sup- ply curve kinked? b) The market quantity supplied at a price of 15 cents is____________ million pounds. The market quantity supplied at a price of 30 cents is ____________million pounds.4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for maize in Panama. The world price (Pw) of maize is $260 per ton and is represented by the horizontal black line. Throughout the question, 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. (? 500 Domestic Demand Domestic Supply 470 440 410 380 350 320 290 P 260 230 200 20 40 60 80 100 120 140 180 180 200 QUANTITY (Tons of maize) If Panama is open to international trade in maize without any restrictions, it will import tons of maize. Suppose the Panamanian government wants to reduce imports to exactly 40 tons of maize to help domestic producers. A tariff of $ per ton PRICE (Dollars per ton)
- Brazil is an importer of computer chips. When the Brazilian government imposes an import quota on computer chips, consumer surplus decreases, total surplus increases in the Brazilian computer chip market. consumer surplus increases, total surplus decreases in the Brazilian computer chip market. consumer surplus decreases, total surplus decreases in the Brazilian computer chip market. consumer surplus increases, total surplus increases in the Brazilian computer chip market. O O O7. 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 caseIf 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…
- 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…5. At a price of $20, country 2 will a) offer for export 9 units of this product. b) seek to import 9 units of this product. c) choose not to trade. d) increase supply4. 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…
- Supply Ра B D Pw Demand Q Which area in the above graph represents the loss in total surplus for this market if there is no international trade? (Pw is the price that the good sells for in international markets.) В C and D B and C A B and D A and B A and C A and D AExplain how a US QUOTA on foreign dairy would affect each group in the economy. Helps sales because the competition is limited Hurt by decreased supply which causes higher prices Benefits from support from US producers, but risks causing harm to the economy Hurts sales because the purchases are limited, but may benefit from higher prices paid for their products :: US Government :: Foreign Producers :: Domestic Consumers (US consumers) :: Domestic Producers2 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?
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