Optimal tariff setting without the small country assumption) US demand and supply for wheat are Q = 120 – p and Q = p respectively. The rest of the world ROW demand and supply
Q: 8. Which of the following would be a deadweight loss from a tariff? A) The shift of consumer surplus…
A: Answer for the given question 9:- Explanation:- There will be decrease in import by 20 million…
Q: 11. (Figure: Home Market II) For the large-country in the graph, after the tariff is imposed, the…
A: A tariff is a duty charged on imports of goods. A country imports a large proportion of goods from…
Q: The domestic demand and supply of some good is as follows: Qd = 100 -0.25P Qs = P - 50 The world…
A: A tariff is a tax imposed on imports of the country. Tariff imposed protects domestic producers from…
Q: The figure below the nypothetical domesic supply and demand for baseball caps In the country of…
A: The world price of the good is 3 which is less than the equilibrium price =5.
Q: 3. Import quotas Kazakhstan is an apple producer, as well as an importer of apples. Suppose the…
A: A deadweight loss implies to cost to society made by market inefficiency, which happens when supply…
Q: Which scenario describes the operation of a tariff? Angola opens up trade with the world corn market…
A: Both answers are given below
Q: Explain how a US tariff on foreign trucks would affect each group in the economy. Helps sales…
A: A tariff is a levy imposed on products and services imported from another country by one country.
Q: If Zambia is open to international trade in limes without any restrictions, it will import Suppose…
A: Import is the difference between the domestic demand and domestic supply. Import = Quantity demanded…
Q: If Bangladesh is open to international trade in oranges without any restrictions, it will import…
A: Imports are the difference between domestic demand and domestic supply. In the graph, at the world…
Q: PRICE (Dollars per ton) 980 Domestic Demand 930 880 830 780 730 680 630 580 530 480 + 1 Domestic…
A: The demand curve is the downward-sloping curve. The supply curve is the upward-sloping curve. The…
Q: QUESTION 3 Figure 9-15 Price per Saddle P₂ P₁ G a. с 1 I Q₁ Q₂ B E Q3 Q4 Domestic Supply Tariff…
A: Tarrif is a financial instrument which is imposed by government in terms of tax or duty to regulate…
Q: Consider Figure 4.1. In the absence of trade, Mexico's producer surplus and consumer surplus…
A: Equilibrium in the market occurs at the intersection of demand and supply curves.
Q: 4. Effects of a tariff on international trade The following graph shows the domestic demand for and…
A: The government imposes an import duty in order to deter imports. Tariffs are put in place to protect…
Q: The following graph shows the domestic demand for and supply of maize in Bolivia. The world price…
A: International trade refers to the exchange of goods, services, human capital, and technology across…
Q: Homework: International Trade and Comparative Advantage 440 Supply 340 315 K 290 265 Demand PRICE…
A: We have been given the market for wheat in New Zealand. The world price is lower than the New…
Q: The demand for cameras in a certain country is given by D = 8000 – 30P, where P is the price of…
A: Given Domestic demand equation of camera: D=8000-30P Domestic supply equation of camera: S=4000+10P…
Q: Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green…
A: Tariffs are taxes(T) imposed by a government on imported services and items. By raising the price(P)…
Q: 6. Import quotas Kazakhstan is an apple producer, as well as an importer of apples. Suppose the…
A: Deadweight loss implies the loss of economic efficiency that occurs when the equilibrium of a market…
Q: 40 36 32 28 24 20 16 12 8 16 24 32 40 48 56 64 Quantity (millions of shirts per year) The figure…
A: When world price of a good is less than the equilibrium price in a country then there is shortage of…
Q: 4. Effects of a tariff on international trade The following graph shows the domestic demand for and…
A: International trade:International trade means buying and selling of goods and services from outside…
Q: Determine the effect of the tariff on Home import-competing producers APS = Home consumers ACS =…
A: Given informationHome demand curveP=10-1/20QdHome supply curveP=4+1/20QsForeign Demand curve…
Q: Exporting countries Which of the following will be true, everything else remaining constant, for a…
A: Goods and services produced in one country and sold to consumers in another are known as exports.…
Q: If a tariff levied by a small country causes the welfare of the country to fall, why would such a…
A: If a tariff levied by a small country causes the welfare of the country to fall .
Q: Kazakhstan is a grape producer, as well as an importer of grapes. Suppose the following graph shows…
A: Deadweight loss is the cost that society has to bear because of the inefficiency of the market…
Q: If Panama is open to international trade in lemons without any restrictions, it will import Suppose…
A: The demand curve is the downward-sloping curve.The supply curve is the upward-sloping curve.The…
Q: 3. Import quotas Kazakhstan is a grape producer, as well as an importer of grapes. Suppose the…
A: Deadweight loss signifies the welfare loss experienced by the economy due to the inefficient…
Q: Consider a small country that exports steel. Suppose the following graph depicts the domestic demand…
A: A government policy known as an export subsidy promotes the export of goods while discourages their…
Q: Suppose Bolivia is open to free trade in the world market for wheat. Because of Bolivia's small…
A: At world price: consumer surplus = 0.5 (490 - 250) (160-0) => consumer surplus = 19,200 ----…
Q: The following graph shows the domestic supply of and demand for soybeans in Guatemala. The world…
A: In an open economy, consumers and producers have an incentive to gain more from making economic…
Q: Refer to the accompanying diagram, which shows the domestic demand and supply curves for cotton…
A: Producer revenue will be the total receipts from selling the goods. Producer revenue = Price *…
Q: . The United States currently imports all of its coffee. The annual demand for coffee by U.S.…
A: Hey, Thank you for the question. According to our policy we can only answer 3 subparts per question.…
Q: 4. Effects of a tariff on international trade The following graph shows the domestic supply of and…
A: Import tariff refers to the government imposed taxes on imported goods and services when a firm or…
Q: Figure 7-2 Price (dollars per pound) $3.00 2.50 1.75 0.50 12 18 26 38 45 U.S. Supply U.S. Demand…
A: A tariff is a tax or custom duty placed on imported goods or services to protect domestic producers.…
Q: The following graph shows the domestic supply of and demand for soybeans in Honduras. The world…
A: In an open economy, consumers and producers have an incentive to gain more from making economic…
Q: The following graph shows the domestic supply of and demand for maize in Guatemala. The world price…
A: When world price is less than equilibrium price, quantity demanded exceeds quantity supplied and the…
Q: 4. Effects of a tariff on international trade The following graph shows the domestic supply of and…
A: A nation engages in international trade on the basis of its comparative advantage. A nation is said…
Q: PRICE (Dollars per ton) 865 Domestic Demand 830 795 760 725 690 655 620 585 550 515 0 + I 40 80…
A: Demand curve is the downward sloping curve. Supply curve is the upward sloping curve. Equilibrium…
Q: Evaluate this statement: “If the United States imposed a uniform excise tariff on all foreign…
A: Tariff: A tariff is a kind of tax that is imposed on the import and export of the commodity.…
Q: Refer to the diagram below, where Sd and Dd are the domestic supply and demand for a product, Pt is…
A: Tariff revenue: Products and services are imported from foreign nations whenever required. However,…
Q: The figure below shows the hypothetical domestic supply and demand for baseball caps in the country…
A: An import tariff stands as a tax applied to goods brought into a country from abroad. It falls under…
Q: Suppose that the United States increases its tariff on steel imports. Steel prices to U.S. consumers…
A: A tariff is a tax or duty imposed by a government on imported or exported goods. Tariffs are…
Q: Macmillan Learning (Figure: The Regional Monopolist) Use Figure: The Regional Monopolist. Assume a…
A: In a monopoly market structure, there exists a single seller. The monopolist will maximize its…
Q: The figure below shows the hypothetical domestic supply and demand for baseball caps in the country…
A:
Q: 4. Effects of a tariff on international trade The following graph shows the domestic supply of and…
A: According to the given graph, the world price is $530, and the domestic equilibrium price is $720,…
Q: The following graph shows the domestic supply of and demand for wheat in New Zealand. The world…
A: When country open for trade, it means it allows products of other countries to enter to its domestic…
Q: QUESTION 4 In the graph below, the quantity of imports before and after imposing a $2 tariff would…
A: A tariff refers to the tax imposed by a government on commodities and services imported from other…
(Optimal tariff setting without the small country assumption)
US demand and supply for wheat are Q = 120 – p and Q = p respectively. The rest of the world ROW demand and supply for wheat are Q = 240 – 4p and Q = 2p respectively.
Suppose the US is imposing $t (per unit) tariff for imports from the rest of the world. What should the tariff t be, in order to maximize Tariff Revenues?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- 4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for maize in Panama. The world price (Pw) of maize is $260 per ton and is represented by the horizontal black line. Throughout the question, 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. (? 500 Domestic Demand Domestic Supply 470 440 410 380 350 320 290 P 260 230 200 20 40 60 80 100 120 140 180 180 200 QUANTITY (Tons of maize) If Panama is open to international trade in maize without any restrictions, it will import tons of maize. Suppose the Panamanian government wants to reduce imports to exactly 40 tons of maize to help domestic producers. A tariff of $ per ton PRICE (Dollars per ton)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
- China placed tariffs on the importation of US soybeans. Assume that the domestic market for soybeans in China is described by the following equations: Demand: P = 11.5 – Q Supply: P = 5.5 + Q Price is in 10 Yuan (¥) per bushel of soybeans and the units for Quantity are 100 million bushels per year. This is to make graphing simpler. This does NOT mean that the price is 10 and quantity is 100. Rather it means that if the price was 40¥ and the quantity was 7,500,000,000 bushels, this would plot as 4 and 7.5 respectively. The world price for soybeans is ¥65/bushel (this would graph as a horizontal line at 6.5). Graph the soybean market in China showing equilibrium both with no barriers to trade and with a ¥15/bushel tariff. Be sure to fully and clearly label the graph including: Domestic Demand curve (D), Domestic Supply curve (S), the World Price (WP), and the Price with tariffs (PT), along with the quantities imported both with and without the tariff. Based on your graph, what…The following graph shows the domestic supply of and demand for wheat in Bangladesh. The world price (Pw) of wheat is $245 per bushel and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of wheat and that there are no transportation or transaction costs associated with international trade in wheat. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 515 Domestic Demand Domestic Supply 485 455 425 395 365 + 335 305 275 P W 245 215 10 20 30 40 50 80 70 80 90 100 QUANTITY (Bushels of wheat) PRICE (Dollars per bushel)4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of oranges in Honduras. The world price (Pw) of oranges is $535 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with international trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Domestic Demand 775 735 X 695 655 615 535 + 895 PRICE (Dollars per ton) 855 815 575 495 Domestic Supply 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Tons of oranges) PW A tariff set at this level would raise ? If Honduras is open to international trade in oranges without any restrictions, it will import Suppose the Honduran government wants to reduce…
- Price $36 $30 $26 I I Home market S D 20 40 80 100 Quantity Price 40 World market I 80 X* + t ·X* Imports The graphs show the case for a tariff imposed by a large country. According to these graphs, if the world price of the product is given as $30 and a $10 tariff is imposed, then the new price after the tariff is $36. So the terms-of-trade gain is 40 80 10 160US imports of sugar are subject to a quota. Although rounded up, the figures used in this exercise are close to reality. Thanks to the quota, US production of sugar is 6 million ton/year, instead of 5 million without the quota, and US consumption of sugar is 8 million ton/year, instead of 9 million without the quota. The US consumer pays $480/ton, whereas the world price is $280/ton. a) Easy: What is the volume of the quota? b) Easy: Why is the US price higher with the quota? c) Medium: Can you plot US supply and demand curves? Show graphically the impact of the quota for consumers and producers.Kazakhstan is an apple producer, as well as an importer of apples. Suppose the following graph shows Kazakhstan's domestic market for apples, where Sx is the supply curve and Dx is the demand curve. The free trade world price of apples (Pw) is $200 per ton. Suppose Kazakhstan's government restricts imports of apples to 120,000 tons. The world price of apples is not affected by the quota. Analyze the effects of the quota on Kazakhstan's welfare. On the following graph, use the purple line (diamond symbol) to draw the Kazakhstan's supply curve including the quota SK+Q. (Hint: Draw this as a straight line even though this curve should be equivalent to the domestic supply curve below the world price.) Then use the grey line (star symbol) to indicate the new price of apples with a quota of 120,000 apples. PRICE (Dollars perton) 1000 900 800 700 000 500 400 300 200 -- 100 D 0 30 00 90 120 160 Sk 180 210 240 270 300 5x+Q -- Price with Quota Change in PS Quota Rents DWL
- Assume that the weekly domestic demand for petroleum is represented by the equation: P= -2.25Q + 600. And, the weekly domestic supply of petroleum is represented by the equation: P= 1.5Q + 25. Assume also, that the world price of petroleum is $200. What is the domestic autarky price and quantity when this economy is closed to trade? What would be the total quantity of petroleum demanded when the economy is open to international trade? What would be the volume of imports when the economy is open to trade? What is the import dependency ratio in this economy when it is open for international trade in petroleum?12. If the free trade price is lIP and this country imposes a trade tariff of $3, what will be the resulting net welfare loss to the economy? a)$3 b)$27 C)$13.5 d)$40.5 e)$9 13. if the free trade price is IP and this country imposes an import quota of 6 units, what will be the welfare loss to this economy? a)$3 b)$27 c)$13.5 d)$40.5 e)$184. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of times in Jordan. The world price (Pw) of limes is $790 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of limes and that there are no transportation or transaction costs associated with international trade in limes. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. PRICE (Dollars perton) 1110 1070 1030 9:00 950 910 BTO 830 790 750 710 Domestic Demand 0 10 1 100 Domestic Supply 150 200 250 300 350 400 450 500 QUANTITY (Tons of times)
