Consider a market for an imported good.There are no domestic producers. The marketsupply function is assumed to be upwardsloping and the market demand function isassumed to be downward sloping. There is nomarket failure in the beginning. Thegovernment is considering imposing a tariff ora quota to increase tax revenue. Bear in mindthat producer surplus is not considered aspart of social welfare since they are allforeigners. a. 8% With the help of a diagram,identify the effects on consumer surplus,producer surplus and social welfare with theimposition of tariff.b. 8% With the help of adiagram, identify the effects on consumersurplus, producer surplus and social welfarewith the imposition of quota, whereas thequota equals the market quantity in part a. c.4% As an advisor to the government, whichoption will you recommend? Briefly explain inthe lights of efficiency????

To import a good, means a certain good is bought and brought from another country. It comes under…

foreigners. a. 8% With the help of a diagram, identify the effects on consumer surplus, producer surplus and social welfare with the imposition of tariff.b. 8% With the help of a diagram, identify the effects on consumer surplus, producer surplus and social welfare with the imposition of quota, whereas the quota equals the market quantity in part a. c. 4% As an advisor to the government, which option will you recommend? Briefly explain in the lights of efficiency????

foreigners. a. 8% With the help of a diagram, identify the effects on consumer surplus, producer surplus and social welfare with the imposition of tariff.b. 8% With the help of a diagram, identify the effects on consumer surplus, producer surplus and social welfare with the imposition of quota, whereas the quota equals the market quantity in part a. c. 4% As an advisor to the government, which option will you recommend? Briefly explain in the lights of efficiency????

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Carefully explain how the imposition of a tariff is different for a large country (that can affect the world price) than a small country. Show your work graphically and explain in words.
What are the benefits and costs of import tariffs?
Use the following graph to show the effects of the $200 tariff. Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green points (triangle symbols) to show the consumer surplus with the tariff and the purple triangle (diamond symbols) to show the producer surplus with the tariff. Lastly, use the orange quadrilateral (square symbols) to shade the area representing government revenue received from the tariff and the tan points (rectangle symbols) to shade the areas representing deadweight loss (DWL) caused by the tariff. PRICE (Dollars per ton) 1200 1100 1000 900 800 700 600 500 400 300 200 Domestic Demand 0 20 40 Domestic Supply 60 80 100 120 140 QUANTITY (Tons of wheat) 160 P -0 W 180 200 World Price Plus Tariff CS PS Government Revenue DWL ?
What is the difference between tariffs and quotas? What are the benefits of reducing barriers to trade? Provide one example of a tariff and quota between the U.S. and China. I have the first and second questions answered. I would like assistance with the third question... Provide one example of a tariff and quota between theUS and China.
Tariff on tennis racquets Suppose a country imports tennis racquets. If the government introduces a tariff on tennis racquets, the tariff revenue it collects will exceed the reduction in CS to domestic buyers of racquets. a) true b) false Can someone help me to understand this question? If a tariff is imposed the consumer surplus will be reduced but do we if it will be greater than the revenue the government collects? any help will be appreciated.
Price P1 D 01 Quantity The graph above shows domestic supply and demand with trade in a SMALL country. With trade, this country can purchase at the world price, Pw. Suppose that this country imposes a $5 per unit tariff on this good. Which of the following is true? O There will not be deadweight losses due to this tariff, since it is a small country. The domestic price will rise by $5. O Consumers will be better off. Producers will not increase domestic production.
Consider the market for coffee in the small, isolated country of Krakozhia. Within Krakozhia, the domestic demand for coffee is: Q = 500-2p and the domestic supply of coffee is: Q* = -150+ 3p
Assume Australia is an importer of sofas and there are no trade restrictions. Australian consumers buy 1 000 000 sofas per year, of which 450 000 are produced domestically and 550 000 are imported.a Suppose that a technological advance among Swedish sofa manufacturers causes the world price of sofas to fall by $200. Draw a graph to show how this change affects the welfare of Australian consumers and Australian producers, and how it affects total surplus in Australia.b After the fall in price, Australian consumers buy 1 150 000 sofas, of which 300 000 are produced domestically and 850 000 are imported. Calculate the change in consumer surplus, producer surplus and total surplus from the price reduction.c If the government responded by putting a $200 tariff on imported sofas, what would this do? Calculate the revenue that would be raised and the deadweight loss. Would it be a good policy from the standpoint of Australian welfare? Who might support the policy?d Suppose that the fall in…
H2.
Home Demand: 90 - 2Pt Foreign Demand: 50 - 4Pt*Home Supply: 30 + 2Pt Foreign Supply: 10 + 2Pt* There are demand and supply functions for good corn for the home country and demand and supply functions for good wheat for the foreign country. Home country as an importer and foreign country as an exporter trade with each other, at zero cost of transportation.A. Find and graph the equilibrium under free trade. What is the world price and thevolume of trade? Also, in the absence of trade, what are the prices that would prevailin home country for corn and in foreign country for wheat?.(Pt = Pt* = Pw -> Pw; world prices)B. Suppose home imposes a specific tariff of 5 on corn imports. Find and graph theeffects of tariff on price of corn in each country, on the quantity of corn supplied anddemanded in each country, on volume of trade? And briefly explain these results inrelation to the effects of the tariff?C. Let the tariff conditions in section (b) be valid. Determine and graph the effect of…
The US decides to impose a tariff on Avocados of $0.75 each Under Free Trade you have the following information: $1 per Unit World and US Price: Domestic Consumption 25 Billion Units 1 Billion Units Domestic Production: Under a Tariff you have the following information: New US Price: $1.75 per Unit Domestic Consumption: Domestic Production: 21 Billion Units 5 Billion Units (a) How much does the government gain in tariff revenue? (b) How much do domestic producers gain? (c) How much do consumers lose? (d) What is net national or "dead weight" loss?
The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. 12 16987654321 10 G с A Di B E F Domestic supply World price + tariff - World price Domestic demand 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Q Refer to the above figure. The tariff decreases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F. O decreases producer surplus by the area C+D and decreases consumer surplus by the area D + E + F O increases producer surplus by the area C and decreases consumer surplus by the area C+D+E+F O increases producer surplus by the area B + C and decrease consumer surplus by the area D + E + F