Refer to the graph to answer this question. Based on the Tariff graph, which of the following statements is most true? A. Government revenue is reduced by a tariff. B. A tariff increases consumer surplus. C. A tariff reduces consumer surplus. D. A tariff increases imports.
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Refer to the graph to answer this question. Based on the Tariff graph, which of the following statements is most true?
A. Government revenue is reduced by a tariff.
B. A tariff increases
C. A tariff reduces consumer surplus.
D. A tariff increases imports.
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- 7. For many years, various groups have accused China of "dumping" exports onto the US market. That is, they claim that the Chinese government subsidizes Chinese exporting firms to allow them to sell at lower prices than US firms and/or lower than sellers from other countries. Some trade policy analysts argue that the US is harmed by this dumping behavior and that the US should impose restrictions on imports from China. Use a supply and demand diagram to assess this argument. Do you agree with the argument made and policy prescribed by the trade analysts?4. Tariffs Suppose Kenya is open to free trade in the world market for wheat. Because of Kenya's small size, the demand for and supply of wheat in Kenya do not affect the world price. The following graph shows the domestic wheat market in Kenya. The world price of wheat is Pw =$250 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). 490 Domestic Demand Domestic Supply 460 CS 430 400 370 PS 340 310 280 250 220 190 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of tons of wheat) If Kenya allows international trade in the market for wheat, it will import tons of wheat. Now suppose the Kenyan government decides to impose a tariff of $60 on each imported ton of wheat. After the tariff, the price Kenyan consumers pay for a ton of wheat is $ and Kenya will import tons…[India is the world’s largest consumer of sugar. Assume the world price for sugar is $750 per ton.] [Assume India currently has a tariff of $50 per ton on sugar and imports 7 million tons of sugar. Show this situation in a graph. Label the quantity demanded and the quantity supplied domestically and imports clearly on a graph. Explain your graph in 3-4 sentences. How to draw the graph?
- If a country removes a tariff on imported shoes, we expect the domestic price of shoes to and the number of shoes consumed in the domestic market to a. fall; fall b. fall; rise c. rise; fall d. rise: rise2. According to the graph, answer the following questions about Pencil Sharpeners. Price of Pencil Sharpeners $24 16 12 4 Domestic Supply World Price Domestic Demand 0 200 300 450 Quantity of Pencil Sharpeners a. What is the equilibrium price of Pencil Sharpeners before trade? b. What is the equilibrium quantity of Pencil Sharpeners before trade? c. What is the price of Pencil Sharpeners after trade is allowed? d. What is the quantity of Pencil Sharpeners exported? e. What is the amount of consumer surplus before trade? f. What is the amount of consumer surplus after trade? g. What is the amount of producer surplus before trade? h. What is the amount of producer surplus after trade? i. What is the amount of total surplus before trade? j. What is the amount of total surplus after trade? k. What is the change in total surplus because of trade?Question 02. In terms of welfare, what is a difference between a tariff imposed by a large country and a tariff imposed by a small country? A. A tariff imposed by a large country has no deadweight consumption and production losses. B. A tariff imposed by a large country has a terms-of-trade effect. C. A tariff imposed by a small country has a terms-of-trade effect. D. A tariff imposed by a large country has no deadweight consumption loss. Question 03. The small nation of Endor currently produces 100,000 board feet of lumber at $600 per 1,000 board feet. Then it begins to trade at the world price of $500 per 1,000 board feet. As a result of trade, Endor's production falls to 50,000 board feet and its consumption increases to 200,000 board feet. What is Endor's total gain in consumer surplus once it begins to trade? A. $10,000 B. $15,000 C. $100,000 D. $150,000
- During the first 6 months of 2008, the United States imported from Africa, Asia, and Latin America more than 1.6 billion pounds of coffee and did not export any coffee. How is the gain from imports distributed between consumers and domestic producers? A. U.S. producer surplus shrinks. B. U.S. consumer surplus increases. C. Total U.S. surplus increases. D. All the above answers are correct.Consider a small country that exports good Z. Some of the total quantity of Z that is domestically produced is consumed by domestic consumers and the rest of it is exported. Then suppose that the government imposed a ban (a prohibition) on Z being exported. Show the effects of this export ban using a carefully labelled demand and supply diagram. On your diagram, shade-in the area that represent the deadweight loss caused by the export ban (please do not shade-in any other areas) and explain your reasoning.Tricky question. Consider the diagram below, depicting the United States Market for Airplanes (hundreds of jets on the horizontal axis, and millions of dollars on the vertical axis). Suppose around the world, a 2 (million dollar) tariff is placed on United States Airplanes. What will exports of planes now be (round to one significant digit). Tricky question. Consider the diagram below, depicting the United States Market for Airplanes (hundreds of jets on the horizontal axis, and millions of dollars on the vertical axis). Suppose around the world, a 2 (million dollar) tariff is placed on United States Airplanes. Given exports, about how much will United States producers of airplanes wind up paying in tariffs?
- Consider the following information pertaining to a country's imports, consumption, and production of t-shirts following the removal of Multi Fiber Agreement (MFA) quotas: Under After МFA МFA World Price ($/shirt) Domestic Price (S/shirt) Domestic Consumption (millions of shirts) Domestic Production (millions of shirts) 2.00 2.00 2.50 2.00 100 125 75 50 a. Use the information in the table above to graph the effects of the quota removal on domestic consumption and production. Include a companion graph for the world market like that shown in class. b. The deadweight loss associated with the quota is: c. The quota rents that were earned under the quota are: d. The gain in consumer surplus associated with quota removal is: e. The loss in producer surplus from the removal of the quota is: f. Assuming that the foreign government assigned the quota licenses, the amount the home country gained from removal of the quota is: 4.The tsunamis that hit Japan in 2011 and India and Sri Lanka in 2004 were devastating, and their effects were felt for many years afterward. Natural disasters of this type as well as international events often result in severe disruptions to the supply ofallegations that meat inspectors and politicians had received bribes to overlook improper meat packing practices and allow sales of tainted food. How would the closing of export markets for a country’s beef products together with a fall in domestic sales of beef products and an increase in the domestic equilibrium quantity be reflected in supply-anddemand diagrams of that country’s foreign and domestic markets for beef in the short run?Refer to the graph for the following questions. 1. Which country has the absolute advantage in production of Good A? A. Country Y B. Neither Country has an absolute advantage of producing Good A. C. Country X 2. Which Country has the comparative advantage in production of Good A? A. Neither Country has a comparative advantage in producing Good A. B. Country X C. Country Y 3. Which Country has the com advantage in production of Good B? A. Country X B. Country Y C. Neither country has a comparative advantage in producing Good B.