(Figure: Market for Engines) According to the figure, if there is no international trade, the equilibrium price in this market is: Price 2,000 1,000 500 Domestic supply Domestic demand 1.000 Quantity of engines

(Figure: Market for Engines) According to the figure, if there is no international trade, the equilibrium price in this market is: Price 2,000 1,000 500 Domestic supply Domestic demand 1.000 Quantity of engines

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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PRICE (Dollars per tonne) 800 Domestic Demand 750 700 650 600 550 500 450 400 350 300 0 Domestic Supply 40 80 120 160 200 240 280 320 360 400 QUANTITY (Thousands of tonnes of tangerines) No Trade Equilibrium A Consumer Surplus ◇ Producer Surplus Based on the previous graph, total surplus in the absence of international trade is the graph.) $25 million. (Hint: Take note of the units on the axes of The following graph shows the same domestic demand and supply curves for tangerines in Guatemala presented in the previous graph. Suppose that the Guatemalan government changes its international trade policy to allow free trade in tangerines. The horizontal black line (Pw) represents the world price of tangerines at $500 per tonne. Assume that Guatemala's entry into the world market for tangerines has no effect on the world price and that there are no transportation or transaction costs associated with international trade in tangerines. Also assume that domestic suppliers will satisfy domestic…
8. The arguments for restricting trade Suppose there is a policy debate regarding the United States imposing trade restrictions on imported tires: A congresswoman from a state with several tire factories argues that the government should impose a tariff on tires because they are a necessary input into the production of various weapons. Free trade would make the United States overly dependent on foreign countries for the supply of tires. In case of a war, the United States might not be able to make or purchase enough tires and, therefore, would not be able to make enough weapons to defend itself. Which of the following justifications is the congresswoman using to argue for the trade restriction on tires? O Saving domestic jobs argument O Low foreign wages argument O National defense argument O Infant industry argument O Foreign export subsidies argument
A 5 peso import tariff would raise how much government revenue? a) $3,000 b) 9,500 c) $12,500 d) $6,500
1. Wheat and the welfare consequences of trade:a. [Basic static analysis of trade] Construct a simple model of the (wholesale) market for wheatglobally, and in Australia. Provide a brief but clear explanation to accompany yourdiagrams, and reflect on what access to international trade means for Australian farmers,food manufacturers (e.g. bakeries) and food consumers (i.e. households). b. [Extended dynamic analysis] The market for wheat is affected by the recent unrest inUkraine (“Ukraine war could send...”, 2022). Wheat prices are reported to have increased55 per cent even before the invasion, just based on fears of sanctions and disruptedsupply, as Russia and Ukraine account for a large portion of global wheat supply. Russiais also a key supplier of fertilisers used by Australian farmers. How can we expect this toaffect Australian wheat producers? What flow-on effects might we expect to see in thewider Australian economy? 2. Petrol and the welfare consequences of taxes:a. [Basic…
4. Tariffs Suppose Kenya is open to free trade in the world market for wheat. Because of Kenya's small size, the demand for and supply of wheat in Kenya do not affect the world price. The following graph shows the domestic wheat market in Kenya. 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). 490 Domestic Demand Domestic Supply 460 CS 430 400 370 PS 340 310 280 250 220 190 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of tons of wheat) If Kenya allows international trade in the market for wheat, it will import tons of wheat. Now suppose the Kenyan government decides to impose a tariff of $60 on each imported ton of wheat. After the tariff, the price Kenyan consumers pay for a ton of wheat is $ and Kenya will import tons…
(Figure: Gains from Trade) Refer to the figure. What are the unexploited gains from trade at the free market equilibrium? $25 Supply 20 15 10 Demand 50 100 $0 $1,000 $1,500 $500
[India is the world’s largest consumer of sugar. Assume the world price for sugar is $750 per ton.] [Assume India currently has a tariff of $50 per ton on sugar and imports 7 million tons of sugar. Show this situation in a graph. Label the quantity demanded and the quantity supplied domestically and imports clearly on a graph. Explain your graph in 3-4 sentences. How to draw the graph?
Predict what happen to the international price and quantity traded of the manufactured good in Figure 1.4 with an improvement in technology in the domestic market.
4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for maize in Burundi. Burundi is open to international trade of maize without any restrictions. The world price (Pw) of maize is $260 per ton and is represented by the horizontal black line. Throughout this problem, 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. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per ton) 530 500 Graph Input Tool Market for Maize in Burundi Supply…
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2. According to the graph, answer the following questions about Pencil Sharpeners. Price of Pencil Sharpeners $24 16 12 4 Domestic Supply World Price Domestic Demand 0 200 300 450 Quantity of Pencil Sharpeners a. What is the equilibrium price of Pencil Sharpeners before trade? b. What is the equilibrium quantity of Pencil Sharpeners before trade? c. What is the price of Pencil Sharpeners after trade is allowed? d. What is the quantity of Pencil Sharpeners exported? e. What is the amount of consumer surplus before trade? f. What is the amount of consumer surplus after trade? g. What is the amount of producer surplus before trade? h. What is the amount of producer surplus after trade? i. What is the amount of total surplus before trade? j. What is the amount of total surplus after trade? k. What is the change in total surplus because of trade?
Supply Ра B D Pw Demand Q Which area in the above graph represents the loss in total surplus for this market if there is no international trade? (Pw is the price that the good sells for in international markets.) В C and D B and C A B and D A and B A and C A and D A