Answered: part a The effect of a tariff on the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

part a

The effect of a tariff on the quantity demanded of an imported commodity:

a will be higher the greater the elasticity of its demand.

b will be lower the greater the elasticity of its demand.

c does not depend on its elasticity of demand.

d will only depend on its elasticity of supply.

part b:

In a market supplied by both domestic and foreign producers the government establishes a quota on imports at a level below current imports. The quantity sold by domestic producers will ______________ and the equilibrium quantity in the market overall will ______________.

a not change; not change

b increase; decrease

c decrease; decrease

d decrease; not change

Part C: The picture attached

Assume the U.S. imports bananas from abroad at a market price of $0.25
per banana, and a tariff of $0.10 is placed on imported bananas. If the
supply and demand for bananas are normal supply and demand
relationships, which of the following represents the resulting equilibrium in
the U.S. market for bananas produced abroad?
Price
O Targets placed: 0/1
You can place up to 1 targets
Banana Market with a Tariff
Original
Supply
B
A
Original
Demand
Millions of bananas produced
abroad
Undo
Delete selected
Remove All

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