Price P1 P3 V W Y P2 U Z D Quantity Q1 Q4 Qs Q3 Figure 4 Domestic market for a good Figure 4 shows a country's domestic market for a good. There is perfect competition. The supply curve, S, is the domestic producers' supply curve for the good. Dis the domestic consumers' demand curve. With free trade, the price in the domestic economy equals the world price, P2. However the domestic government has imposed a tariff on imports that has raised the price of the good in the domestic economy from P2 to P3. Which area or areas of the diagram show the government's tariff revenue? Select one answer. Select one: O z O W plus Y ох O x plus Z

Price P1 P3 V W Y P2 U Z D Quantity Q1 Q4 Qs Q3 Figure 4 Domestic market for a good Figure 4 shows a country's domestic market for a good. There is perfect competition. The supply curve, S, is the domestic producers' supply curve for the good. Dis the domestic consumers' demand curve. With free trade, the price in the domestic economy equals the world price, P2. However the domestic government has imposed a tariff on imports that has raised the price of the good in the domestic economy from P2 to P3. Which area or areas of the diagram show the government's tariff revenue? Select one answer. Select one: O z O W plus Y ох O x plus Z

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Refer to Figure 9-1. With free trade, total surplus is Group of answer choices $210.00. $552.50. $80.00. $245.50. $472.50. Refer to Figure 9-1. If international trade is prohibited, total surplus will fall by: Group of answer choices $245. $97.5. $210. $102.5 $80.
a. Consider a closed economy (an autarky). The equilibrium price of computers in this autarky is equal to $1,000. Suppose that the world price of computers is equal to $800. Does this country have comparative advantage in producing computers? If this autarky opens up to international trade, will this country export or import computers? b. Show the consumer surplus, producer surplus, equilibrium price and quantity traded for the closed economy in part-a in the market for computers.
Suppose a large country A initially imposed a tariff on its imports and is now considering removing its tariff. Use a domestic-market graph to a) show the effect of country A’s tariff removal on the world’s price, country A’s import price, import quantity, consumer surplus, producer surplus, and government revenue. b) identify country A’s net welfare change as a result of its tariff removal. Is country A unambiguously better off? c) Use a different graph to show how foreign producers will be affected by country A’s tariff removal? d) What factor determines the level of optimal tariff for country A? Please make sure to graph fpr both parts "a" and "c"
The country of 'Away' has a market for widgets described by Qd = 12 - P and Qs = P. In autarky, the equilibrium price of widgets is $6. The world price is $10 per widget. Away has decided to open their market to international trade. 1. Home will ______ widgets. 2. Domestic production of widgets will be _______ 3. Domestic consumption of widgets will be __________ 4. Imports/Exports will be ___________ The country of 'Home' has a market for widgets described by Qd = 16 - P and Qs = P - 4. In autarky, the equilibrium price of widgets is $10. The world price is $8 per widget. Home has decided to open their market to international trade. 1. Home will ______ widgets. 2. Domestic production of widgets will be _________ 3. Domestic consumption of widgets will be __________ 4. Imports/Exports will be __________ The country of 'Away' has a market for widgets described by Qd = 12 - P and Qs = P. What is the Consumer Surplus in Away at a price of $9? Do not…
The US, the domestic country, is currently operating a price of $14 per hammer. The US and China are not engaging in international trade. A new treaty is signed, and the world price and domestic price of the product are now $10 per unit. The US producers claim that this new treaty will harm them. The world price of hammers is $10 per hammer before and after the treaty. A. Calculate the consumer surplus before international trade is allowed. Show your work. A. Calculate the consumer surplus after international trade is allowed. Show your work. C. Will the producers in the domestic economy support or argue against opening up to international trade? Briefly explain and support your answer.
Price of Baskets $14 10 7 1 $45 $80 $160 40 $210 70 105 Domestic Supply Refer to Figure 9-1. With free trade, what would consumer surplus be? World Price Domestic Demand Quantity of Baskets
Suppose you have the following for white t-shirts market:Market demand is P=125-(3/8)QMarket supply is P=5+(1/8)Q. there is now a global supply that is horizontal at $15. But the government now imposes a tariff of $5 per unit of t-shirt.a. Obviously the world price and domestic price will now be $20. Calculate the quantityproduced and demanded domestically? b. Using graphs show the changes in CS (Consumer Surplus) and PS (Producer Surplus) comparedto Free Trade. Show also the government revenue, which is tariff per t-shirt times the new level of imports. Who gains in comparison to Free Trade scenario? Who loses? What is the welfare gain or loss? Show by using graphs.
Price of Wagons gain by $240 lose by $240 gain by $120 lose by $75 $18.5 8 5 1 0 40 70 90 Domestic Supply World Price Domestic Demand Quantity of Wagons Refer to the figure above. If this country allows free trade in wagons, how much will consumers gain or lose?
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The United States imports a lot of cars, despite having its own auto industry. Each of the following statements are arguments some people could make for restricting imports of cars into the United States. For each statement, identify the threat to the U.S. industry that the argument is trying to counter, and identify the opportunities that would be given up if the argument wins. SELECT THE CORRECT ANSWER a. “Foreign manufacturers are offloading their cheap cars onto the U.S. market. We should stop this so that consumers have access to higher-quality U.S. cars.” -National security requires that strategically important goods be produced domestically. -Protection can help infant industries develop. -Foreign competition may lead to job losses. -Anti-dumping laws prevent unfair competition. -Trade should not enable foreign firms to skirt U.S. regulations. b. “We must foster the innovation of small car companies, like Tesla. Allowing foreign electric vehicle manufacturers…
The graph below shows the effects of restricting trade. Match the right with the left side correctly: Domestic Demand supply Domestic supply + imports 1 PNO Trade P Trade 2 с 45 A 3 Q Qs Q Qd Consumer surplus with NO TRADE [ Choose ] Producer surplus with NO TRADE [ Choose ] Consumer surplus WITH TRADE [ Choose ] Producer surplus WITH TRADE [ Choose ] DWL with NO TRADE [ Choose ] > > > > B
Using the diagram above, suppose the country is initially engaged in free trade and the world price is $11. If the government introduces a tariff of $4, what is value of the welfare loss to the domestic economy? Group of answer choices a. $200 b. $225 c. $100 d. $400 e. $375