Export Policies in Resource-Based and High-Technology Industries Suppose Home is a small exporter of wheat. Initially, the world price is $70 per ton. Now suppose the Home government decides to support its domestic producer with a production subsidy of $10 per ton. Use the accompanying figure to answer the following questions. a. What is the quantity exported under free trade? 60 Exported quantity: units. Incorrect Adjust the graph to show the impact of the producer subsidy, 100 95 Supply then answer the questions below. 90 85 80 75 70 65 A 60 8 55 E 50 45 40 35 30 25 Demand 20 15 10 5 D 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity Incorroct

Export Policies in Resource-Based and High-Technology Industries Suppose Home is a small exporter of wheat. Initially, the world price is $70 per ton. Now suppose the Home government decides to support its domestic producer with a production subsidy of $10 per ton. Use the accompanying figure to answer the following questions. a. What is the quantity exported under free trade? 60 Exported quantity: units. Incorrect Adjust the graph to show the impact of the producer subsidy, 100 95 Supply then answer the questions below. 90 85 80 75 70 65 A 60 8 55 E 50 45 40 35 30 25 Demand 20 15 10 5 D 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity Incorroct

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter28: International Trade

Section: Chapter Questions

Problem 9P

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Explain how a subsidy on agricultural goods like sugar adversely affects the income of foreign producers of imported sugar.
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Consider a small country that exports steel. Suppose the following graph depicts the domestic demand and supply for steel in this country. One of the two price lines represents the world price of steel. ecause this country exports steel, the world price is represented by . Suppose that a “pro-trade” government decides to subsidize the export of steel by paying $10 for each ton sold abroad. With this export subsidy, the price paid by domestic consumers is per ton, and the price received by domestic producers is per ton. The quantity of steel consumed by domestic consumers , the quantity of steel produced by domestic producers , and the quantity of steel exported . True or False: With the export subsidy, domestic producers will sell steel to domestic consumers and sell the rest abroad. True False Under the export subsidy, consumer surplus is and producer surplus is . Government revenue by (increases or Decreases) . As a…
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