The diagram below shows the situation of a small country with free-trade in an imported product (at a price of $10) and the situationwith a tariff on the product (at a price of $11). After the imposition of the tariff, the coutry's import willand the governmenttariff revenue will be_P$11$100000030344040increase from 30 to 34, $34decrease from 40 to 34, $10increase from 6 to 18; $18decrease from 18 to 6; $6S(not drawnto scale)48PdomPintD

Tariff may be defined as a tax imposed by the government on the goods that are imported from other…

and the government The diagram below shows the situation of a small country with free-trade in an imported product (at a price of $10) and the situation with a tariff on the product (at a price of $11). After the imposition of the tariff, the coutry's import will tariff revenue will be $11 $10 S (not drawn to scale) 1 1 0 30 34 40 48 increase from 30 to 34, $34 ○ decrease from 40 to 34, $10 O increase from 6 to 18; $18 O decrease from 18 to 6; $6 Paom int D

and the government The diagram below shows the situation of a small country with free-trade in an imported product (at a price of $10) and the situation with a tariff on the product (at a price of $11). After the imposition of the tariff, the coutry's import will tariff revenue will be $11 $10 S (not drawn to scale) 1 1 0 30 34 40 48 increase from 30 to 34, $34 ○ decrease from 40 to 34, $10 O increase from 6 to 18; $18 O decrease from 18 to 6; $6 Paom int D

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter33: International Trade

Section: Chapter Questions

Problem 16RQ: Are the gains from international trade more likely to be relatively more important to large or small...

See similar textbooks

Similar questions

Are the gains from international trade more likely to be relatively more important to large or small countries?
Using the graph, assume that the government imposes a $1 tariff on hammers, Answer the following questions given this information, (see the attached pictures.)
1he world price of wine is below the price that wouldprevail in Canada in the absence of trade.n Assuming that Canadian imports of wine arc asmall part of total world wine production, drawa graph for the Canadian market for wine underfree trade. (dentify consumer surplus, producersurplus, and total surplus in an appropriate table.h. Now suppose that an unusual shift of the GulfStream leads to an unseasonably cold summerin Europe, destroying much of the grape harvf"st thNP. What eff,..ct dnM thi~ "hock h:tvPonthe world price of wine? Using your graph andtable from part (a), show the effect on consumersurplus, producer surplus, and total surplusin Canada. Who arc the winners and losers?l" C':ln:'lci:'l M :t whnlP hPHf"r nr wnMOf" nff?
5. You have been asked to quantify the effects of removing a country's tariff on sugar. The ompute its value? nard part of the work is already done: Somebody has estimated how many pouncs Sugar would be produced, consumed, and imported by the country if there were no saber duty. You are given the information shown in the table. Estimated Situation without Tariff Situation with Import Tariff World price $0.10 per pound $0.10 per pound $0.02 per pound $0.12 per pound Tariff $0.10 per pound Domestic price Domestic consumption (billions of pounds per year) Domestic production (billions of pounds per year) Imports (billions of pounds per year) 22 20 8. 16 12 Calculate the following measures: a. The domestic consumers' gain from removing the tariff. b. The domestic producers' loss from removing the tariff. C. The government tariff revenue loss. d. The net effect on national well-being.
Consider the effects of an import tariff in a small coutnry using the graph below. Domestic Supply Pw +t P Domestic Demand 40 45 75 95 105 Which area on the graph corresponds to consumption loss? What is domestic consumption with free trade? O W O Y
7. Country A has a tariff on imported TVs. But,the new government of Country A decided tocharge only half the tariffs against TVs fromcountry B, but keep the full tariff against TVsfrom countries C, D, and E. What would be theimpact on______O.A. The price of TVs in CountryAO.B.Quantity of domestic supply in Country AO.C. Quantity of imports in Country AO.D. Quantity of TVS exported by Country BO.E. Quantity of TVs exported by Countries C, D,and E
Suppose that Congress imposes a tariff on importedautomobiles to protect the U.S. auto industry fromforeign competition. Assuming that the United Statesis a price taker in the world auto market, show thefollowing on a diagram: the change in the quantityof imports, the loss to U.S. consumers, the gainto U.S. manufacturers, government revenue, andthe deadweight loss associated with the tariff. Theloss to consumers can be decomposed into threepieces: a gain to domestic producers, revenue forthe government, and a deadweight loss. Use yourdiagram to identify these three pieces.
Consider the arguments for restricting trade.a. Imagine that you are a lobbyist for timber, anestablished industry suffering from low-pricedforeign competition, and you are trying to getCongress to pass trade restrictions. Which twoor three of the five arguments discussed in thechapter do you think would be most persuasiveto the average member of Congress? Explain yourreasoning.b. Now assume you are an astute student ofeconomics (not a hard assumption, we hope).Although all the arguments for restricting tradehave their shortcomings, name the two or threearguments that seem to make the most economicsense to you. For each, describe the economicrationale for and against these arguments for traderestrictions.
Price of Rice $/ton €140 €120 €100 с a b rise by 40 units. 80 120 160 200 240 300 Quantity of Rice rise by 40 units. e The graph above reflects the market for rice in Spain. If the world price is 100euros and the government imposes a 20% tax on imports the amount of imports will S drop by 40 units. drop by 80 units.
Which of the following are potentially valid arguments for tariffs or export subsi- dies, and which are not? Explain your answers. a. “Dairy producer earning in Wales are at their lowest peak despite an overallrise in farm business incomes.” b. “ThemoreecologicallycertifiedfoodsEuropeanUnionrequires,thehighertheprice of these products will be on common market.” c. “US soybean exports to China and India don’t just mean increased wealth forfarmers – they mean increased wealth for everyone in the value chain.” d. “ThePETindustrycontinuedtosustainU.S.recyclingprograms;thisshowsthe strength of the PET recycling market in the face of significant global economicslowdown and a drop in virgin feedstock prices.” e. “The price of coal has been stable, but the production dropped 10.3 percent, and workers have been forced to look for other jobs.”
In the following diagram, Sao and D are the domestic supply and demand for a product and Poisthe world price of that produc. Sisthe product supply after an import quota is imposed. Soo Si A Pa 8 P. E Po CH15シ Xy Z Quantity Refer to the figure above to answer the following question. Assuming there is no tariff, the imposition of the import quota: will increase the revenues of foreign producers by area F+ J leads to an extra revenue to forcign producers equal to arcas G + H, which partly counteracts the loss they bear because of lower quantitics supplied will increase the revenuce of the Canadian government by areas G+H will increase the revenues of foreign producers by area E will increase the revenue of the Canadian government by areas E + F - G+H+J
The nation of Theopolis recenty put a tariff on the importation of washing machines. Which of the following statements is true based on this information? (a) This tariff harms consumers in Theopolis who buy washing machines (b) This tariff benefts the producers of washing machines in Theopolis (c) This tarif hurts the producers of washing machines in other countries that export to Theopolis (d) The tariff will increase overall weltare in Theopolis Explain all the false answers also