at Bolivia's entry into the world market for lemons has no effect on the world price and there are no transportation or transaction costs associated ith international trade in lemons. Also assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or mporting takes place. "se the green triangle (triangle symbol) to shade consumer surplus, and then use the purple triangle (diamond symbol) to shade producer surplus. 1100 Domestic Demand Domestic Supply 1000 Consumer Surplus 900 800 Pw 700 Producer Surplus 600 500 400 300 200 100 35 70 105 140 175 210 245 280 315 350 QUANTITY (Tons of lemons) MacBook Air PRICE (Dollars per ton)-

at Bolivia's entry into the world market for lemons has no effect on the world price and there are no transportation or transaction costs associated ith international trade in lemons. Also assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or mporting takes place. "se the green triangle (triangle symbol) to shade consumer surplus, and then use the purple triangle (diamond symbol) to shade producer surplus. 1100 Domestic Demand Domestic Supply 1000 Consumer Surplus 900 800 Pw 700 Producer Surplus 600 500 400 300 200 100 35 70 105 140 175 210 245 280 315 350 QUANTITY (Tons of lemons) MacBook Air PRICE (Dollars per ton)-

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. Assume that Sweden and Norway currently producing and consuming soybeans and coffee. The following table 1 shows the prices of soybeans and coffee for both nations. Table 1: Prices of soybean and coffee Price (per carton) Soybeans (S) Coffee ($) Sweden Norway 64 85 71 82 Based on relative price of coffee, can Norway gain by exporting soybeans? If no, what commodity Norway should export? Briefly explain this scenario by using an appropriate diagram.
Figure: Tariffs Price $90 88 150 O $90; 1,150 O $60; 650 O $60, 1,150 O $40; 1,800 Domestic spply World supply tarif 1150 1550 1800 In the domestic market with international trade and no tariffs, the price is Domenic demand Quantity and the quantity purchased in the United States is units.
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The graph below shows the domestic supply and demand and the world price for an exporting country. Price of $100 shoes in 90 U.S. dollars C B D + B 80 D D Pworld 60 50 40 30 20 10 B A K O 1 Exporting country supply and demand graph 2 3 Schoos Exports = 2.5 million Identify the area on the graph that represents the consumer surplus for domestic consumers if the country exports its product. Dshoes 4 5 Millions of pairs of shoos
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Domestic Supply $10 $8 AIB D E $6 World P Domestic D 20 30 35 40 50 Q (millions of towels) Consider the economy depicted in the graph and assume there is international trade. If the government imposed a tariff of $2, what will its total revenue be? O D+G O E+F O None of the above O A+B
5. Both foreign (Sf) and domestic steel (Sd) producers supply the US market (Sdtf is the combined supply curve). US Steel Market without Tariff US Steel Market with Tariff 10 O 10 20 30 40 s0 60 70 80 90 100 Quanity in millions of tons per year D 10 20 30 40 50 60 70 80 90 100 Quantity in millions of tons per Year 0 d st Sdet D -Sd St -Sdef a. After the imposition of the tariff, what is the approximate price of steel? Answer: b. How much of the $200 per ton tariff is paid by domestic consumers of steel? Answer: C. How is the quantity of steel consumed in the US affected? Answer: d. Who benefits and who is harmed by the tariff? Answer. asn soot u uo ad aous Price per Ton in 100s US0
3. Using the graph to the right, suppose the country opens up to international trade, the world price is $40, and the government institutes a $10 tariff on each unit imported. What is the quantity demanded, quantity produced domestically, quantity imported from abroad, consumer surplus, producer surplus, tariff revenue, and deadweight loss? Price 0 10 20 30 40 50 60 70 80 90 100 0 50 Comestic Supply Domestic Demand 100 150 200 250 300 350 400 450 Quantity 500
Suppose the U.S. imposes a trade embargo onNorth Korea in order to exert political pressureon the government. Consider how the embargowill affect U.S. producers. Under what conditionswould they support the embargo? Why mightthey oppose it?
Why imposing import quota on necessity products (like onion) may create grievanceamong the consumers? Explain using a suitable diagram. How may government reducethe consumers’ grievance?