Number 9, parts b,c,d **Economic Analysis of Trade and Tariffs**In analyzing the impact of trade, tariffs, and subsidies on a nation’s economy, consider the following points:**6. Impact on China’s Welfare:** - This section asks about the effects on consumer surplus, producer surplus, and tax revenue when the welfare of domestic consumers, producers, and the government is affected by a fall in the price of domestic goods.**7. Trade Elasticity:** - Evaluate statements regarding the elasticity of demand: a. Greater elasticity implies greater gains from trade. b. Perfectly inelastic demand suggests no gains. c. Perfectly inelastic demand means consumers don't benefit from trade.**8. Textile Taxation in Isoland:** - After rejecting a tariff, Isoland considers a consumer tax on textiles. a. Identify production and consumption levels with this tax. b. Construct a consumption tax table like Figure 4. c. Determine which raises more government revenue—consumption tax or tariff—and which has a smaller loss.**9. U.S. Television Imports:** - U.S. imports 1 million televisions annually (400,000 produced domestically), and examines a price fall due to Japanese technological advancement. a. Pre- and post-price fall scenarios are explored. b. Impact on surplus and welfare from price reduction is assessed. c. Consideration of a $100 tariff on imports and resulting revenue and deadweight loss is discussed. d. Analyze scenario involving a $100 subsidy from Japan affecting prices and U.S. welfare.**10. Steel Exports and Subsidies in a Small Country:** - Analyze the effects if a government subsidizes steel exports. - Examine changes in consumer surplus, producer surplus, and overall economic efficiency.For further study resources related to this topic, visit engagebrain.com and search for "Mankiw."(Note: For this educational exercise, hypothetical scenarios are considered to illustrate economic principles, focusing on consumer and producer behavior in response to policy changes.)

Economies engage in international trade to benefit from each other's comparative advantage by…

b. After the fall in price, consumers buy 1.2 million televisions, of which 200,000 are produced domes- tically and 1 million are imported. Calculate the change in consumer surplus, producer surplus, and total surplus from the price reduction. c. If the government responded by putting a $100 tariff on imported televisions, what would this do? Calculate the revenue that would be raised and the deadweight loss. Would it be a good policy from the standpoint of U.S. welfare? Who might support the policy? d. Suppose that the fall in price is attributable not to technological advance but to a $100 per tele- vision subsidy from the Japanese government to Japanese industry. How would this affect your analysis?

b. After the fall in price, consumers buy 1.2 million televisions, of which 200,000 are produced domes- tically and 1 million are imported. Calculate the change in consumer surplus, producer surplus, and total surplus from the price reduction. c. If the government responded by putting a $100 tariff on imported televisions, what would this do? Calculate the revenue that would be raised and the deadweight loss. Would it be a good policy from the standpoint of U.S. welfare? Who might support the policy? d. Suppose that the fall in price is attributable not to technological advance but to a $100 per tele- vision subsidy from the Japanese government to Japanese industry. How would this affect your analysis?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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