Suppose the market for a certain manufactured product in Country 1 is given by the following functions: QD = 140-20P QS = -20+ 20P Where QD and QS (in relevant units) are the demand and supply functions, respectively and P is the unit price of the product. Suppose the world price of the product is P2.00 (equivalent) and the government is intending to impose a 50 percent tariff rate on its imports. There is no protection cost to the economy arising from a direct subsidy of P20 to producers: Select one: O True O False

Suppose the market for a certain manufactured product in Country 1 is given by the following functions: QD = 140-20P QS = -20+ 20P Where QD and QS (in relevant units) are the demand and supply functions, respectively and P is the unit price of the product. Suppose the world price of the product is P2.00 (equivalent) and the government is intending to impose a 50 percent tariff rate on its imports. There is no protection cost to the economy arising from a direct subsidy of P20 to producers: Select one: O True O False

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Q1: Using a domestic-market demand- and supply-curve graph, (a) show the impact of tariff on a small country's import price, domestic demand, domestic supply, import quantity, consumer surplus, producer surplus, government revenue, and total welfare; (b) Is the country unambiguously worse off as a result of the tariff? (c) In the same graph, show how to achieve the same import quantity with an import quota; (d) When would the tariff and the import quota lead to the same amount of welfare change? (e) How would the answers to (a) and (b) change for a large country?
Country X has 100 units of labour and country Y has 200 units of labour. Both countries produce computers and televisions. The unit labour requirements are given in the table below: Computers Televisions Country X 50 Country Y 100 Assume that free trade exists and that the relative price is such that both countries specialize completely in the industry in which they have a comparative advantage (neither country produces both goods). The supply of computers relative to televisions will be Select one: a. 0.02 (or 1/50) O b. 0.013 (or 1/75) c. 0.01 (or 1/100) d. impossible to determine without knowing the relative price of computers in terms of televisions
The imposition of a tariff on foreign goods is more likely to decrease producer surplus of the domestic firms competing with those foreign firms on whom the tariff is imposed. True or False
Quotas may be set on worldwide imports or on imports from a specific country.True or False
A country decides to impose higher tariffs on imported goods to encourage domestic production. This policy change impacts the circular flow of income and expenditure by altering the dynamics of international trade. In this scenario, the imposition of tariffs on imports primarily:A) Acts as a leakage in the circular flowB) Functions as an injection into the circular flowC) Has no significant impact on the circular flowD) Reduces government expenditure in the circular flow Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.
Now, suppose that Island is a large exporting country with the following demand and supply functions and the free-trade world price is $5,000 per unit. D = 900,000 − 150P and S = 100,000 + 50P The Island government offers an export subsidy that increases the domestic market price to $5,500 and lowers the world price to $4,500. However, starting next month, the Island government will be removing the export subsidy in compliance with the latest international trade pact. A. What is the impact of the removal of the subsidy on domestic consumers? B. What is the change in producer surplus due to the movement to free trade? C. What is the net effect of moving to free trade on Island welfare?
The demand and supply functions for a product in a large country are given as Qd = 130 – 3P and Qs = -30 + 2P respectively. The world price is 20$ and the large country imposes an ad valorem tariff of %50. After the imposition of tariff world price decreases to 16$. Calculate the change in consumer surplus, producer surplus, government revenue and social welfare after the imposition of tariff.
The small nation of Capralia has an abundant stock of Pashmina goats, a breed that yields high-quality cashmere. Capralia's authorities are still debating whether to open their economy to international trade. The international price of cashmere is $70,000 per metric ton, and the Capralian cashmere sells for $50,000 per metric ton. Place the consumer surplus triangle (CS) and the producer surplus triangle (PS) to correctly depict consumer and producer surplus if Capralia chooses to open its borders to the international cashmere trade. 100 Price (metric ton) 90 80 70 80 50 40 30 20 10 10 0 Capralia's Domestic Cashmere Market 6 domestic supply domestic equilibrium 12 18 24 30 36 42 Quantity (thousands of metric tons) 48 54 60 CS Capralia will import 36,000 metric tons of cashmere. Capralia will export 24.000 metric tons of cashmere. Capralia will not engage in international trade. Capralia will export 12,000 metric tons of cashmere. Capralia will import 24,000 metric tons of cashmere. PS…
Domestic demand for natural gas in a small economy is characterized by the equation P=350-5QP=350-5Q , domestic supply is characterized by the equation Q=0.5-P+35Q=0.5-P+35 , and the world price is equal to $60. An export tariff of $6 per unit will Group of answer choices result in net welfare loss of 14.6 lead to a loss in consumer surplus lead to an export level that is less than half of the original amount result in tariff revenue that is larger than the loss in producer surplus
Question 2 Suppose that the demand for rice in Japan is given by the function Q = 100 -p and the domestic supply is Q = p. Suppose that the inverse world supply function is p = 30. (a) What would be the change in domestic producer surplus if imported rice is banned? (b) What would be the change in consumer surplus if a $5 tariff is imposed on imported rice? (c) What would be the change in imports if a $5 tariff is imposed on imported rice? (d) What would be the smallest tariff to completely eliminate imported rice? (e) A $5 per unit tariff has the same effect on producer and consumer surplus as a quota of
All of the following statements about import tariffs are true except Group of answer choices they result in countries selling the product at a lower price to domestic consumers they reduce the volume of trade and the gains from trade they limit specialization and the division of labor they yield revenue for the government that levies tariffs
4. A graphical comparison of tariffs and quotas Alagir and Ertil are small countries that protect their economic growth from rapidly advancing globalization by limiting the import of rugs to 20 million. To this end, each country imposes a different type of trade barrier when the world price (Pw) is $3,000. In Alagir, the government decides to impose a tariff of $2,000 per rug; in Ertil, the government implements a quota of 20 million rugs. Assume that Alagir and Ertil have identical domestic demand (Do) and supply (S) curves for rugs as shown on the following graph. Under these conditions, the price of rugs is $5,000 per rug in each country. PRICE (Dolars per rug) 10000 9000 8000 7000 8000 5000 4000 3000 2000 1000 D 0 P.. 10 D₂ * 20 D₁ XX ☆ XX 40 30 50 60 70 QUANTITY (Millions of rugs) S 80 90 100 (?)