Homework # 3 for International Trade 15th at 11:00 pm on Blackboard. Due Tuesday, Oct. Assume that the United States, as a steel-importing nation, is large enough that changes in the quantity of its imports influence the world price of steel. 800 600 560 Sa 20 40 100 120 Showt 5 dow a. With free trade, what is the equilibrium price of steel? At this price, how many tons of steel are purchased by U.S. buyers? How many are supplied by domestic producers? And, how many are imported? b. To protect its producers from foreign competition, suppose the U.S. government levies a specific tariff of $240 per ton on steel imports. With the tariff, what is the domestic price of steel? At this price, how many tons of steel are purchased by U.S. buyers? How many are supplied by domestic producers? And, how many are imported? C. Calculate the consumption, protective, redistribution, domestic revenue, and terms-of- trade effect. d. What impact does the tariff have on the overall welfare of the United States?

Homework # 3 for International Trade 15th at 11:00 pm on Blackboard. Due Tuesday, Oct. Assume that the United States, as a steel-importing nation, is large enough that changes in the quantity of its imports influence the world price of steel. 800 600 560 Sa 20 40 100 120 Showt 5 dow a. With free trade, what is the equilibrium price of steel? At this price, how many tons of steel are purchased by U.S. buyers? How many are supplied by domestic producers? And, how many are imported? b. To protect its producers from foreign competition, suppose the U.S. government levies a specific tariff of $240 per ton on steel imports. With the tariff, what is the domestic price of steel? At this price, how many tons of steel are purchased by U.S. buyers? How many are supplied by domestic producers? And, how many are imported? C. Calculate the consumption, protective, redistribution, domestic revenue, and terms-of- trade effect. d. What impact does the tariff have on the overall welfare of the United States?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter34: Globalization And Protectionism

Section: Chapter Questions

Problem 39CTQ: From the Work It Out Effects of Trade Barriers, you can see that a tariff raises the price of...

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Trade has income distribution effects. For example, suppose that because of a government-negotiated reduction in trade barriers, trade between Germany and the Czech Republic increases. Germany sells house paint to the Czech Republic. The Czech Republic sells alarm clocks to Germany. Would you expect this pattern of trade to increase or decrease jobs and wages in the paint industry in Germany? The alarm clock industry in Germany? The paint industry in Czech Republic? The alarm clock industry in Czech Republic? What has to happen for there to be no increase in total unemployment in both countries?
You just overheard your friend say the following: Poor countries like Malawi have no absolute advantages. They have poor soil, low investments in formal education and hence low-skill workers, no capital, and no natural resources to speak of. Because they have no advantage, they cannot benefit from trade. How would you respond?
If trade increases world GDP by 1 per year, what is the global impact of this increase over 10 years? How does this increase compare to the annual GDP of a country like Sri Lanka? Discuss. Hint To answer this question, here are steps you may want to consider. Go to the World Development Indicators (online) published by the World Bank. Find the current level of World GDP in constant international dollars. Also, find the GDP of Sri Lanka in constant international dollars. Once you have these two numbers, compute the amount the additional increase in global incomes due to trade and compare that number to Sri Lankas GDP.
If opening up to free trade would benefit a nation, then why do nations not just eliminate their trade barriers, and not bother with international trade negotiations?
Why might Belgium, France, Italy, and Sweden have a higher export to GDP ratio than the United States?
Consider two countries: South Korea and Taiwan. Taiwan can produce one million mobile phones per day at the cost of 10 per phone and South Korea can produce 50 million mobile phones at 5 per phone. Assume these phones are the same type and quality and there is only one price. What is the minimum price at which both countries will engage in trade?
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Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The demand (d) and supply (s) for cameras In Thailand and Japan is described by the following functions: QsT=-5+14P QsJ=-10+14P QdT=60-P QdJ=80-P P is the price measured in a common currency used in both countries, such as the Thai Baht. Compute the equilibrium price (P) and quantities in each country without trade. Now assume that free trade occurs. The free-trade price goes to 56.36 Baht. Who exports and Imports cameras and in what quantities?
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