Price of Carnations $14 12 10 8 6 4 2 100 200 300 400 500 Tariff Refer to Figure #2. Opening trade but without the tariff, the domestic price and domestic quantity demanded are $4 and 500 $4 and 100 $6 and 200 $6 and 400 Domestic Supply World Price Domestic Demand 600 Quantity of Carnations (in dozens)

Price of Carnations $14 12 10 8 6 4 2 100 200 300 400 500 Tariff Refer to Figure #2. Opening trade but without the tariff, the domestic price and domestic quantity demanded are $4 and 500 $4 and 100 $6 and 200 $6 and 400 Domestic Supply World Price Domestic Demand 600 Quantity of Carnations (in dozens)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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a. In the absence of trade, what is the equilibrium price and equilibrium quantity? b. The government opens the wheat market to free trade and U.S enters the Turkish market, pricing wheat at $40 per ton. What will happen to the domestic price of wheat? What will be the new domestic quantity supplied and domestic quantity demanded? How much wheat will be imported from U.S? c. The government imposes a $10 per ton tariff on all imported wheat. What will happen to the domestic price of wheat? What will be the new domestic quantity supplied and domestic quantity demanded? How much wheat will now be imported from U.S? d. How much revenue will the Turkish government receive from the $10 per ton tariff?
3. Import quotas Kazakhstan is a grape producer, as well as an importer of grapes. Suppose the following graph shows Kazakhstan's domestic market for grapes, where Sx is the supply curve and Dx is the demand curve. The free trade world price of grapes (Pw) is $800 per ton. Suppose Kazakhstan's government restricts imports of grapes to 120,000 tons. The world price of grapes 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 grapes with a quota of 120,000 grapes. PRICE (Dollars per ton) 4000 3600 3200 2800 2400 2000 1600 1200 800 400 0 --‒‒‒‒‒‒ 0 40 SK DK Pw 80 120 160 200 240 280 320 360 400 QUANTITY (Thousands of tons) SK+Q Price…
Korea’s demand for computers isQK = 2, 000 − PkIts supply isQK = −200 + PkChina’s demand for computers isQC = 1, 000 − Pc Its supply isQC = Pc1. Suppose that Korea imposes a specific tariff of $100 on computerimports. Calculate the price of computers in each country and thequantity of computers supplied and demanded in each country. Alsocalculate the volume of trade.
The graph below shows the domestic supply of and demand for mangos in India. 25 24 23 22 21 20 19 18 17 16 15 (300, 18) 13 10 8 7 6 5 4 3 2 1 Price ($) 500 100 200 300 400 Quantity of mangos (cases) 600 '700 回回 The world price is $16 a case, and India is open to free trade. Will India export or import mangos? a. India will (Click to select) ☑ mangos since, (Click to select) b. What quantity will domestic producers supply? cases of mangos. c. What quantity will India export or import? Click to enl care of mannan
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Quantify the effects of a country’s tariff on sugar Situation with import tariff Estimated situation without tariff World price $0.10per pound $0.10per pound Tariff $0.02per pound 0 Domestic price $0.12per pound $0.10per pound Domestic consumption (billions of pounds per year) 20 22 Domestic production (billions of pounds per year) 8 6 Imports (billions of pounds per year) 12 16 Calculate the following measures:• The domestic consumers’ gain from removing the tariff. • The domestic producers’ loss from removing the tariff. • The government tariff revenue loss.• The net effect on national well-being.
Figure 9-6 PRICE 219 12 Domestic Supply 11 Domestic Demand 10 9 B E World Price +Tariff World Price 1 2 3 4 5 6 7 8 9 10 11 12 QUANTITY Refer to Figure 9-6. The area C+D+E+F represents O the deadweight loss of the tariff minus government revenue raised by the tariff. O the decrease in total surplus caused by the tariff. O the deadweight loss of the tariff plus government revenue raised by the tariff. O the decrease in consumer surplus caused by the tariff.
The following graph shows the domestic supply of and demand for soybeans in Guatemala. The world price (Pw) of soybeans is $540 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 soybeans and that there are no transportation or transaction costs associated with international trade in soybeans. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. TRICKY YALL 855 820 PRICE (Dollars per ton) 785 750 715 680 645 610 575 540 Domestic Demand 105 0 40 A Domestic Supply Pu NO 120 160 200 240 260 320 340 400 QUANTITY (Tons of soybeans) If Guatemala is open to international trade in soybeans without any restrictions, it will import Suppose the Guatemalan government wants to reduce imports to exactly 160 tons of soybeans to help domestic producers. A tariff of tons of soybeans. per
PRICE (Dollars perton) 1100 Domestic Demand 1000 900 800 700 600 500 400 300 200 100 0 35 Domestic Supply P W 70 105 140 175 210 245 280 315 350 QUANTITY (Tons of limes) Consumer Surplus Producer Surplus Consumer Surplus When South Africa adjusts its trade policy to allow free trade of limes, the price of one ton of limes in South Africa becomes $800. At this price, tons of limes will be demanded in South Africa, and tons will be supplied by domestic suppliers. Therefore, South Africa will export tons of limes. Producer Surplus Using the information from the previous tasks, complete the following table to analyze the welfare effect of allowing free trade. With Free Trade (Dollars) Without Free Trade (Dollars) When South Africa allows free trade, the country's producer surplus by S by S and consumer surplus . Therefore, the net effect of allowing international trade on South Africa's total surplus is a of
Sujee International Trade - End of Chapter Problem The United States is the fifth largest sugar consumer and the fifth largest sugar producer in the world. The U.S. sugar industry has enjoyed trade protection since 1789 when Congress enacted the first tariff against foreign-produced sugar. The accompanying graph depicts the supply and demand for sugar in the United States in 2019. The world price for sugar was $0.12 per pound. a. The United States enacts an import tariff of 6 cents per pound. In the accompanying graph, place the line labeled "World price + tarill" in the graph to reflect this tariff. Price (cesta per pound) 52 54 48 24 18 D 0 B Market for sugar Domestic supply 19 24 Quantity (billions of pounds) CS d. Given the tarill, quantity demanded will be pounds. U.S. imports will therefore be PS e. As a result of the tariff, consumer surplus will economic surplus will GR World Price + tarif b. Next, using the shapes in the graph, shade the areas that represent consumer surplus…
What would happen to U.S. economic welfare if the U.S. eliminated tariffs on solar panel imports? A. U.S. economic welfare would increase because of the social gains from increased U.S. consumption of solar panels B. U.S. economic welfare would decrease because the social gains from increased U.S. production of solar panels would be less than the social costs associated with increased U.S. consumption of solar panels C. U.S. economic welfare would decrease because the social gains from increased U.S. consumption of solar panels would be less than the social costs inflicted on U.S. solar panel producers D. U.S. economic welfare would increase because the social gains from increased U.S. production of solar panels would exceed the social costs associated with increased U.S. consumption of solar panels
4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of limes in Zambia. The world price (Pw) of limes is $810 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 per ton) 1305 1250 1195 1140 1065 1030 975 9.20 865 810 755 Domestic Demand Domestic Supply