A lobbyist for the coal industry in the US argues for increased tariffs.a) derive graphically (make sure that you label the graph completely) the impact ofsuch a tariff on the quantity imported, the quantity produced domestically, and theprice at which coal can be purchased for a standard supply and demand graph.Assume that the world price of coal is smaller than the domestic equilibrium price,and that the US is a smopec. (10 points)b) Illustrate the producer surplus, consumer surplus, and deadweight loss after thetariff has been put in place. (10 points)c) discuss briefly whether a tariff is likely to be a good idea for America or a badidea. (10 points)

a. GraphIn this scenario, the US is a SMOPEC (small open economy with perfect competition). this…

Answered: A lobbyist for the coal industry in the…

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 8PA

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If 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…
3. Welfare effects of a tariff in a small country Suppose Sudan is open to free trade in the world market for maize. Because of Sudan's small size, the demand for and supply of maize in Sudan do not affect the world price. The following graph shows the domestic maize market in Sudan. The world price of maize is Pw = $350 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). 710 Domestic Demand Domestic Supply 670 CS 630 590 550 PS 510 470 430 390 P. W 350 310 15 30 45 60 75 90 105 120 135 150 QUANTITY (Tons of maize) If Sudan allows international trade in the market for maize, it will import tons of maize. Now suppose the Sudanese government decides to impose a tariff of $40 on each imported ton of maize. After the tariff, the price Sudanese consumers pay for a…
ЕОC 10.05 Japan imports crayons into its country; they are a price taker in this market. Suppose the world price of crayons is $5. If Japan imposes a $1 tariff on crayons, what would be the domestic price of crayons and what will happen to the quantity bought? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a The quantity bought will increase and the price will be $6. b The quantity bought will fall and the price will be $6. The quantity bought will fall and the price will be $4. d. The quantity bought will increase and the price will be $4.
QUESTION 6 The following figure depicts the supply and demand schedules of calculators for Greece, a "small" country that is unable to affect the world price. Greece's supply and demand schedules of calculators are respectively depicted by SG and DG Assume that Greece imports calculators from either Germany or France. Suppose Germany is the world's low-cost producer who can supply calculators to Greece at $20 per unit, while France can supply calculators at S30 per unit. Queny f Cako Referring to the above figure, suppose Greece forms a customs union with France. Greece will import: a. 3 calculators at a per-unit price of $40 b.3 calculators at a per-unit price of $30 c.6 calculators at a per-unit price of $30 d.6 calculators at a per-unit price of $40
Home's import demand curve (shown on the graph to the right) for wheat is QMD 80-40P. Foreign's demand curve is Foreign's supply curve is D=80-20P. S-40+20P. 1) Using the line drawing tool, accurately graph Foreign's export supply curve. Label the curve 'EX 2) Using the point drawing tool, assuming free trade between the countries at zero transportation cost, indicate on the graph the world price of wheat and the volume of trade. Label the point Ea Carefully follow the instructions above and only draw the required objects. What would the price of wheat be in the absence of trade? $(Round your answer to the nearest penny) 3- 04 0 Price, P EX 120 MD 10 20 30 40 50 60 70 80 90 100 Quantity, Q 3
3. Welfare effects of a tariff in a small country 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 PWPW = $250 per tonne. 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). If Kenya allows international trade in the market for wheat, it will import tonnes of wheat. Now suppose the Kenyan government decides to impose a tariff of $60 on each imported tonne of wheat. After the tariff, the price Kenyan consumers pay for a tonne of wheat is , and Kenya will import tonnes of wheat. Show the effects of the…
5. Welfare effects of a tariff in a small country 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's surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producers' surplus (PS). PRICE (Dollars per ton) 490 460 430 400 370 340 310 280 250 220 190 + 0 Domestic Demand 5 Domestic Supply 10 15 20 25 30 35 QUANTITY (Thousands of tons of wheat) 40 P 50 If Kenya allows international trade in the market for wheat, it will import Show the effects of the $60 tariff on the following graph. CS PS tons of wheat. Now suppose the Kenyan government decides to impose a tariff of $60…
Short Answer Question Scenario I Suppose the domestic supply (Q) and demand (QD) for MP3 players in the United States is represented by the following set of equations: Q$ = -25 + 10P (supply) QD = 875 - 5P (demand) Refer to Scenario I. If the United States engages in free trade and the international price of MP3 players is $50. (a) Compute the equilibrium price and quantity (without international trade). Show your work to get full credit. (b) Compute the quantity demanded and quantity supplied when the price changes from the equilibrium price to a new price of $50. Show your work to get full credit. (c) Will this country export or import when the price changes to $50? Show your work to get full credit. (d) Compute the change in both the consumer and producer surplus when the price changes from the equilibrium price to a new price of $50. Show your work to get full credit. (e) Compute the net national welfare given the new price of $50. Show your work to get full credit.
Consider the case of the following large country (all prices are measured in euros, and quantities are measured in single units): – Domestic demand curve: P = 3600 –3Q – Domestic supply curve: P = 2Q – World free trade price of imports = 140 euros per unit – When the tariff is introduced, domestic prices rise by exactly one third of the amount of the tariff. Calculate the following. Also show your workouts, draw a diagram depicting the importing country market under free trade and with a tariff. With a 30 euro specific tariff: The change in consumers' surplus going from free trade to the tariff, in euros: __________________________________________________________________________________ The change in producers' surplus going from free trade to the tariff, in euros: __________________________________________________________________________________ The amount of tariff revenue, in euros: __________________________________________________________________________________ The change…
3. Welfare effects of a tariff in a small country Suppose Bolivia is open to free trade in the world market for wheat. Because of Bolivia's small size, the demand for and supply of wheat in Bolivia do not affect the world price. The following graph shows the domestic wheat market in Bolivia. 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). Domestic Supply 460 Domestic Demand 430 cs 400 370 340 PS 310 280 250 220 190 160 0 25 50 75 100 125 150 175 200 225 250 QUANTITY (Tons of wheat) If Bolivia allows international trade in the market for wheat, it will import tons of wheat. Now suppose the Bolivian government decides to impose a tariff of $30 on each imported ton of wheat. After the tariff, the price Bollvian consumers…
China placed tariffs on the importation of US soybeans. Assume that the domestic market for soybeans in China is described by the following equations: Demand: P = 11.5 – Q Supply: P = 5.5 + Q Price is in 10 Yuan (¥) per bushel of soybeans and the units for Quantity are 100 million bushels per year. This is to make graphing simpler. This does NOT mean that the price is 10 and quantity is 100. Rather it means that if the price was 40¥ and the quantity was 7,500,000,000 bushels, this would plot as 4 and 7.5 respectively. The world price for soybeans is ¥65/bushel (this would graph as a horizontal line at 6.5). Graph the soybean market in China showing equilibrium both with no barriers to trade and with a ¥15/bushel tariff. Be sure to fully and clearly label the graph including: Domestic Demand curve (D), Domestic Supply curve (S), the World Price (WP), and the Price with tariffs (PT), along with the quantities imported both with and without the tariff. Based on your graph, what…

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