(Figure: The Market for Calculators) Use Figure: The Market for Calculators. Assume that S and D represent the domestic demand and supply of calculators. The world price, Pw, equals $100. The government imposes a quota restricting imports to 25 calculators. The domestic price rises to and the quota rent is equal to area Figure: The Market for Calculators Price of calculators $300 150 120 100 50 0 A G "Hy... 35 50 60 S $120; K+L $150; G+H+I+J $120; H+ I $150; K+ H+I+L PW D Quantity of calculators

(Figure: The Market for Calculators) Use Figure: The Market for Calculators. Assume that S and D represent the domestic demand and supply of calculators. The world price, Pw, equals $100. The government imposes a quota restricting imports to 25 calculators. The domestic price rises to and the quota rent is equal to area Figure: The Market for Calculators Price of calculators $300 150 120 100 50 0 A G "Hy... 35 50 60 S $120; K+L $150; G+H+I+J $120; H+ I $150; K+ H+I+L PW D Quantity of calculators

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q4
In the domestic market with no trade, the equilibrium price is _____ and the quantity traded is ____ units a. $90, 1,150 b. $60, 650 c. $60, 1,150 d. $40, 1,800
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10. Problems and Applications Q10 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. Use the following graph to help you answer the questions below. You will not be graded on any changes made to this graph. Price of Steel (Dollars perton) 100 90 2 2 2 2 2 2 - 60 40 30 20 10 Demand 0 100 200 300 400 500 600 700 Quantity of Steel (Tons) Supply 800 900 1000 Triangle Polygon
(Figure: Market for Engines) If there is international trade in the market and the world price of an engine is $800, what do areas a and b represent in the figure below?
A 5 peso import tariff would raise how much government revenue? a) $3,000 b) 9,500 c) $12,500 d) $6,500
(Table: The Market for Taxi Rides) Use Table: The Market for Taxi Rides. If a government quota limit at 9 million rides is imposed, the quota rent that will accrue to the owner of a taxi medallion will be per ride, but there will be a total missed opportunity (inefficiency) to consumers and producers of million rides. Table: The Market for Taxi Rides Quantity Demanded (millions of rides per year) Quantity Supplied (millions of rides Fare (per ride) per year) $7.00 6. 14 6.50 7 13 6.00 12 5.50 9 11 5.00 10 10 4.50 4.00 12 3.50 13 3.00 14 6 $1; 1 $3; 3 $4; 4 $2; 2
7. For many years, various groups have accused China of "dumping" exports onto the US market. That is, they claim that the Chinese government subsidizes Chinese exporting firms to allow them to sell at lower prices than US firms and/or lower than sellers from other countries. Some trade policy analysts argue that the US is harmed by this dumping behavior and that the US should impose restrictions on imports from China. Use a supply and demand diagram to assess this argument. Do you agree with the argument made and policy prescribed by the trade analysts?
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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…
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