Alagir and Ertil are small countries that protect their economic growth from rapidly advancing globalization by limiting the import of televisions to 20million. To this end, each country imposes a different type of trade barrier when the world price (Pw) is $2,000. In Alagir, the government decides toimpose a tariff of $3,000 per television; in Ertil, the government implements a quota of 20 million televisions.Assume that Alagir and Ertil have identical domestic demand (Do) and supply (S) curves for televisions as shown on the following graph. Under theseconditions, the price of televisions is $5,000 per television in each country.PRICE (Dollars per television.1000090008000700060005000400030002000100000PD₂D₂IIO TrueO False☆CountryAlagir (tariff = $3,000)Ertil (quota = 20 million televisions)✰10 20 30 40 50 60 70 80 90 100QUANTITY (Millions of televisions)Suppose that in both countries, demand for televisions rises from Do to D₁.SAssuming Alagir keeps the tariff at $3,000 per television, complete the first row of the following table by calculating each of the values given thisincrease in demand. Assuming Ertil maintains a quota of 20 million televisions, complete the second row of the table by calculating each of the valuesgiven this increase in demand.Price(Dollars)Which of the following explain why a quota is a??Quantity Demanded at New Price(Millions of televisions)True or False: The increase in demand helps domestic producers but hurts domestic consumers in Ertil.Imports(Millions of televisions)A quota ensures the domestic industry a ceiling on imports.A foreign producer may offset the quota by the price reductions.By foreclosing the market mechanism, a quota suppresses competition.restrictive trade barrier than an equivalent tariff. Check all that apply.

Import tariffs and quotas are one type of trade restriction that a govt imposes on its economy. It…

Assuming Alagir keeps the tariff at $3,000 per television, complete the first row of the following table by calculating each of the values given this increase in demand. Assuming Ertill maintains a quota of 20 million televisions, complete the second row of the table by calculating each of the values given this increase in demand. Country Alagir (tariff = $3,000) Ertil (quota = 20 million televisions) Price (Dollars) True O False Quantity Demanded at New Price (Millions of televisions) True or False: The increase in demand helps domestic producers but hurts domestic consumers in Ertil. Which of the following explain why a quota is a Imports (Millions of televisions) restrictive trade barrier than an equivalent tariff. Check all that apply. A quota ensures the domestic industry a ceiling on imports. A foreign producer may offset the quota by the price reductions. By foreclosing the market mechanism, a quota suppresses competition.

Assuming Alagir keeps the tariff at $3,000 per television, complete the first row of the following table by calculating each of the values given this increase in demand. Assuming Ertill maintains a quota of 20 million televisions, complete the second row of the table by calculating each of the values given this increase in demand. Country Alagir (tariff = $3,000) Ertil (quota = 20 million televisions) Price (Dollars) True O False Quantity Demanded at New Price (Millions of televisions) True or False: The increase in demand helps domestic producers but hurts domestic consumers in Ertil. Which of the following explain why a quota is a Imports (Millions of televisions) restrictive trade barrier than an equivalent tariff. Check all that apply. A quota ensures the domestic industry a ceiling on imports. A foreign producer may offset the quota by the price reductions. By foreclosing the market mechanism, a quota suppresses competition.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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