Canada has not allowed for the bulk exportation of water. The current price for water for Canadian consumers is $40 per tonne (typically delivered via an underground pipe to your house/business!) and Canadians consume 3 M Tonnes/yr. Unfortunately, climate change has resulted in droughts in California and other Southern states. To help meet this need and make a profit of course, Canada has decided to allow international trade in water. The North America (or world) price for water is currently $60/tonne. (Hint the supply lines does not move..) Explain in words a. what will happen to production (supply) and Canadian demand for water b. the effect on the producer and consumer surplus C. Any imports /exports

Canada has not allowed for the bulk exportation of water. The current price for water for Canadian consumers is $40 per tonne (typically delivered via an underground pipe to your house/business!) and Canadians consume 3 M Tonnes/yr. Unfortunately, climate change has resulted in droughts in California and other Southern states. To help meet this need and make a profit of course, Canada has decided to allow international trade in water. The North America (or world) price for water is currently $60/tonne. (Hint the supply lines does not move..) Explain in words a. what will happen to production (supply) and Canadian demand for water b. the effect on the producer and consumer surplus C. Any imports /exports

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Lesson 12 Question 1
The following graph shows the domestic supply of and demand for maize in Burundi. The world price (Pw) of maize is $270 per ton and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of maize and that there are no transportation or transaction costs associated with international trade in maize. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 450 Domestic Demand Domestic Supply 430 410 390 370 350 330 310 290 P 270 250 40 80 120 180 200 240 280 320 360 400 QUANTITY (Tons of maize) If Burundi is open to international trade in maize without any restrictions, it will import tons of maize. Suppose the Burundian government wants to reduce imports to exactly 160 tons of maize to help domestic producers. A tariff of per ton will achieve this. A tariff set at this level would raise $ in revenue for the…
There is a country which produces cars. It costs $11,000 for the domestic producers to produce one car, but they are not competitive on the world market where these cars are sold at $10,000. There is free trade between this country and the rest of the world right now. The government is thinking about applying export subsidies to promote car export. As a government advisor, try to give a hint whether it is good idea or not? Who wins and who loses by applying the subsidies? How much subsidy would allow domestic producers to sell on the world market? Provide the arguments on which your advice is based!
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The following graph shows the supply and demand curves of gloves for Portugal. Germany and France supply gloves to Portugal at a price of $2 and $3, respectively. The green line indicates a 100% nondiscriminatory tariff on Portugal's glove imports. PRICE (Dollars per pair of gloves) 10 9 O 8 2 1 0 ☐ 0 □ 2 ☐ 4 O ☐ O ☐ O 6 ☐ O ☐ O 8 10 12 14 QUANTITY (Pairs of gloves) Suppose Portugal forms a customs union with France. □ C 16 The customs union results in the trade creation effect of $ 0 Stariff SE F SG O 18 20 (?) and the trade diversion effect of $ If, instead, Portugal forms a customs union with Germany, the result will be a by an amount equal to a effect of $ The overall welfare of Portugal customs union. The welfare of Portugal will