Question 3 Table: U.S. Demand for and Supply of Widgets Price $1 Quantity 5 Supplied Quantity Demanded 20 O 0 widgets 2 widgets 4 widgets O 6 widgets $2 6 19 $3 7 18 $4 8 17 $5 9 15 $6 10 14 $7 $8 11 $9 12 13 13 12 11 $10 14 10 The United States can import widgets from China at $4 each and from Mexico at $5 each. The United States imposes a tariff of $2 on each of its widget imports. Suppose that the United States and Mexico form a free- trade area. How much trade in widgets is diverted in the U.S.-Mexican free-trade area?

Question 3 Table: U.S. Demand for and Supply of Widgets Price $1 Quantity 5 Supplied Quantity Demanded 20 O 0 widgets 2 widgets 4 widgets O 6 widgets $2 6 19 $3 7 18 $4 8 17 $5 9 15 $6 10 14 $7 $8 11 $9 12 13 13 12 11 $10 14 10 The United States can import widgets from China at $4 each and from Mexico at $5 each. The United States imposes a tariff of $2 on each of its widget imports. Suppose that the United States and Mexico form a free- trade area. How much trade in widgets is diverted in the U.S.-Mexican free-trade area?

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 small country is facing the following domestic supply curve of a product: S = 200 + 20P, as well as the following domestic demand curve of a product: D = 400 - 20P. It can import it at a world price of 10 per unit. In addition, each unit of production yields a marginal social benefit of 10. The effect on welfare of an import tariff of 6 per unit is $. O -420 O 500 O -480 O 420 O 320 -500 O :180 O -320 480 O 180
3. Consider the following Offer Curve Diagram. If the nation's tastes for its import commodity increases, Y O P Aut Py B O A's B's P Aut A O the nation's offer curve rotates toward the axis measuring its import commodity. none of the other options. X the partner's offer curve rotates toward the axis measuring its import commodity. the nation's offer curve rotates toward the axis measuring its export commodity. the partner's offer curve rotates toward the axis measuring its export commodity.
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00 7 F. PRICE (Dollars per ton) 4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for soybeans in Honduras. The world price (Pw) of soybeans is $530 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. 2. Domestic Demand Domestic Supply 770 740 710 680 650 620 06 P, 530 MacBook Pro Search or type URL 4. 51 9.
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Figure 5 Price of Wagons $18.5 8 00 5 0 40 70 90 Domestic Supply World Price Domestic Demand Quantity of Wagons Refer to Figure 5. The increase in total surplus resulting from trade is Select one: O a. $60, since consumer surplus increases by $180 and producer surplus falls by $240. O b. $75, since consumer surplus increases by $300 and producer surplus falls by $225. O c. $60, since producer surplus increases by $180 and consumer surplus falls by $240. O d. $75, since consumer surplus increases by $240 and producer surplus falls by $165.
Chapter 10: In the small open economy of Gatorland, the domestic demand for widgets is given by P=100-3Q; the home supply of widget is given by P = Q. The world price is $40. Now let the government of Gatorland give a $15 per unit subsidy on each widget exported. What is the value of total subsidy payments to Gatorland's widget exporters? O $825 O $600 O $125 O $225
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The following are data on U.S. exports and imports in 2012 at the two-digit Harmonized Tariff Schedule (HTS) level. Which products do you think support the Heckscher-Ohlin theorem? Which products are inconsistent?
5. There are two industries in a circular city. Each industry produces a good for export and the export point is the center of the city. The price at the point of export is $15 per unit for the first good and $15 per unit for the second good. Transportation costs within the city are 50 cents per mile per unit for the first good, and 75 cents per mile per unit for the second good. Other costs (labor and capital) are $8 per unit for the first good and $6 per unit for the second good. Firms produce 60 units of the first good and 80 units of the second good per unit of land. The land market is perfectly competitive, which implies that the users of land bid enough to reduce their economic profits to zero. The agricultural bid rent is $30 at all locations. a. Find the bid rent curves for the two industries that correspond to zero economic profits. b. Where do the first and second industries locate in the city? Show on a graph.
5. Both foreign (Sf) and domestic steel (Sd) producers supply the US market (Sdtf is the combined supply curve). US Steel Market without Tariff US Steel Market with Tariff 10 O 10 20 30 40 s0 60 70 80 90 100 Quanity in millions of tons per year D 10 20 30 40 50 60 70 80 90 100 Quantity in millions of tons per Year 0 d st Sdet D -Sd St -Sdef a. After the imposition of the tariff, what is the approximate price of steel? Answer: b. How much of the $200 per ton tariff is paid by domestic consumers of steel? Answer: C. How is the quantity of steel consumed in the US affected? Answer: d. Who benefits and who is harmed by the tariff? Answer. asn soot u uo ad aous Price per Ton in 100s US0