Determine whether the following statements are True, False, or Uncertain. Be sure to explain your answer. Each part ofthe question is worth 5 points and is not related to other parts.a) The optimum tariff is positive for every country.b) Recently, the world prices of oil and wheat have risen significantly while the world prices of manufactured goods suchas cars and toys have fallen. Canada, being an exporter of oil and wheat and an importer of manufactured goods, wouldexperience an improvement in terms of trade.c) Suppose that the autarky price of a commodity is $10 in Nations A, $8 in Nation B, and $6 in Nation C, and Nation A isa small open economy. Initially, Nation A imposes a non-discriminatory ad valorem tariff of 100 percent on imports ofcommodity X from Nations B and C. If Nation A forms a customs union with Nation B, then the formation of a customsunion would lead to trade diversion and trade creation.

a. FALSE. The optimum tariff is positive for a large country because it can influence world prices,…

Answered: Determine whether the following…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The world price of oranges is $15 per bushel. The domestic supply of oranges is 100 + 2(P) and the domestic demand for oranges is 500 – 5(P). Assume for now that this is a small nation that is not able to affect the world market. How would a tariff of $10 per bushel affect this nation? (Consider gains and losses)
Kazakhstan is an apple producer, as well as an importer of apples. Suppose the following graph shows Kazakhstan's domestic market for apples, where SK is the supply curve and D is the demand curve. The free trade world price of apples (Pw) is $200 per ton. Suppose Kazakhstan's government restricts imports of apples to 200,000 tons. The world price of apples is not affected by the quota. Analyze the effects of the quota on Kazakhstan's welfare. On the following graph, use the purple line (diamond symbol) to draw the Kazakhstan's supply curve including the quota SK+Q. (Hint: Draw this as a straight line even though this curve should be equivalent to the domestic supply curve below the world price.) Then use the grey line (star symbol) to indicate the new price of apples with a quota of 200,000 apples.
Suppose a per-unit tariff of $10 is imposed on imported cell phones. After the tariff: - The quantity demanded is 10 million - The quantity supplied domestically is 2 million Calculate the amount of tax revenue collected due to the tariff.
1) The loss of consumer benefits when a tariff imposed on imported consumer good is called: a) Consumer surplus b) Net-welfare gain c) Consumer deadweight cost d) Producer deadweight cost 2) Which one is not true about countries of the world? a) Only large countries involve in an international trade b) Openness of countries to international trade vary between countries c) Countries produce, exchange, and consume goods and services d) Economic development of countries is little affected by the extent of their engagement in international trade e) a and d
Questions 1 and 2 refer to a big home country exporting good Q to ROW (Rest OF the World). The export supply and import demand for good Q are as follows: XS = P MD = 100 –P - Where XS, MD, and P are respectively export supply, import demand, and price Under free trade a. The equilibrium Q and Pare respectively. b. The welfare gains from free trade of the Home country and ROW are respectively. Suppose the Home country gives a subsidy of $20 per unit of exports. With the subsidy a. The equilibrium Q and Pare respectively. o. In comparison with free trade, the changes in home government expenditure, in ROW's welfare, in exporters' welfare, in Home welfare, and in world welfare are and and and and respectively.
Consider a small country. The domestic (home) demand is Qd = 120−3P and supply is Qs = 2P −20 whereQs and Qd are the quantity supplied and demanded, respectively, and P is the price per unit.A) Find the equilibrium price and quantity when the domestic market is closed to international trade.Now, suppose the country opens up to international trade, and the world price is $20 per unit.B) Find the new equilibrium price, domestic quantity supplied and demanded, and quantity imported.C) Suppose the domestic government imposes a tariff of $4 per unit. Find the equilibrium price, domesticquantity supplied and demanded, quantity imported, and tax revenue collected.D) Now, suppose the government impose a quota that limits the quantity of imports to 20 units. Find thenew equilibrium price, domestic quantity supplied and demanded, and quantity imported.E) Calculate Consumer surplus, producer surplus, and total surplus, with free tradeF) Calculate Consumer surplus, producer surplus, tax revenue,…
27. The statement that "if an import tariff raises the relative price of the imported good, the price of the factor used intensively in its production will rise relative to both commodity prices, while the price of the other factor will fall relative to both commodity prices" is called (a) the cancellation axiom (b) the Stolper-Samuelson theorem (c) the law of demand and supply (d) the law of alternatives (e) the principle of comparative advantage oun until on ogui.
In the United States, imposing a tariff on imported vitamin D3 would: Group of answer choices increase total American consumption of vitamin D3. increase American consumption of domestically produced vitamin D3. reduce exports of vitamin D3. decrease domestic production of vitamin D3.
if u.s. quotas on imported goods were eliminated: a) the supply of sugar in the U.S. would shift to the left and the prices would rise b) the world price of sugar would rise c) the demand for sugar in the U.S. would shift to the left and prices would fall. d) the supply of sugar in the U.S. would shift to the right and sugar prices would fall e) None of the answers are correct.
The demand for cameras in a certain country is given by D=8000−30P, where P is the price of a camera. Supply by domestic camera producers is S=4000+10P. Suppose that world price of a camera is $150. If this country decides to trade, which of the following is true? Group of answer choices 3000 cameras will be exported Domestic production of cameras will decrease by 500 Domestic production of cameras will increase by 500 2000 cameras will be imported
fast urgent.
3. Welfare effects of a tariff in a small country Suppose Bolivia is open to free trade in the world market for wheat. Because of Bolivia's small size, the demand for and supply of wheat in Bolivia do not affect the world price. The following graph shows the domestic wheat market in Bolivia. The world price of wheat is Pw = $250 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). (? Domestic Supply 490 Domestic Demand 480 CS 430 400 370 PS 340 310 280 250 220 190 + O 20 40 60 80 100 120 140 180 180 200 QUANTITY (Tons of wheat) If Bolivia allows international trade in the market for wheat, it will import tons of wheat. Now suppose the Bolivian government decides to impose a tariff of $60 on each imported ton of wheat. After the tariff, the price Bolivian…

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