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- 7. Consider a country that imports a good from abroad.For each of following statements, state whether it istrue or false. Explain your answer.a. “The greater the elasticity of demand, the greaterthe gains from trade.”b. “If demand is perfectly inelastic, there are no gainsfrom trade.”c. “If demand is perfectly inelastic, consumers donot benefit from trade.”donetic P Tariff Tar Revenue Damestic Quantity b. What are the price-quantity effects of this tariff on the following? (Assume the country imposing the tariff is a small part of the world market) Domestic consumers: Price will (Click to select) and quantity will (Cick to select) v Domestic producers: Price will (Cick to select) and quantity will [(Clck to select) v Foreign exporters: Price will (Click to select) and quantity will (Cick to select) PriceIf a nation that imports a good imposes a tariff, itwill increasea. the domestic quantity demanded.b. the domestic quantity supplied.c. the quantity imported from abroad.d. the efficiency of the equilibrium
- The nation of Theopolis recenty put a tariff on the importation of washing machines. Which of the following statements is true based on this information? (a) This tariff harms consumers in Theopolis who buy washing machines (b) This tariff benefts the producers of washing machines in Theopolis (c) This tarif hurts the producers of washing machines in other countries that export to Theopolis (d) The tariff will increase overall weltare in Theopolis Explain all the false answers also1.What is the consumption effect of a tariff? How would you describe it in words,without reference to any diagram or numbers? How would you show it on a diagram, and how would you compute its value?If a smaller country imports a good (electronics) from a larger country, is it beneficial for the smaller countryto impose quotas on the good coming from the larger country. Will this affect the consumers of electronics, the domestic producers of electronics and the government?
- 2. What are three negative impact of tariffs?1. What do the welfare effects of an import quota differ from those of import tariff?2 Using the graph, assume that the government imposes a $1 tariff on solar panels. Answer the following questions given this information. Price $13 65 8 Domestic Supply $1.00 Tariff World Price Domestic Demand о 30 40 60 84 96 Quantity a. What is the domestic price and quantity demanded of solar panels after the tariff is imposed? b. What is the quantity of solar panels imported before the tariff? c. What is the quantity of solar panels imported after the tariff? d. What would be the amount of consumer surplus before the tariff? e. What would be the amount of consumer surplus after the tariff? f. What would be the amount of producer surplus before the tariff? g. What would be the amount of producer surplus after the tariff? h. What would be the amount of government revenue because of the tariff? i. What would be the total amount of deadweight loss due to the tariff?
- A 126 World 95 Supply Tariff 90 F World Supply 45 K M Demand 25 46 58 83 Tons of Cement (millions) Suppose Zimbabwe's Government had successfully imposed a tariff on its international manufacturers. Based on Figure 1, fill in the blanks below to determine the: i) Price of cement with the imposition of the tariff = US$ ii) Change in the quantity imported with tariff in comparison to the quantity imported with free trade = million tons of cement 30 P Type here to search FULL HD 1080 acer -----Consider Figure 4.1. In the absence of trade, Mexico's producer surplus and consumer surplus respectively equal a) $240 and $240. b) $120 and $240. c) $180 and $180. d) $180 and $320. CDomestic Supply 14 8 Price-World + Tariff 6. World Price Demand 10 40 60 80 100 Widgets Q2) The graph above shows the domestic supply and demand for sugar in Egypt. a. If Egypt is a small importer what would be the value of a prohibitive tariff? b. Conduct a welfare analysis of tariff shown in the above graph. c. Explain using a model the welfare implications if Egypt is major importer of Under what conditions would the overall welfare improve? Calculations are not required. sugar. 3. 24
