The diagram below shows supply and demand curves for the same good in two countries, A and B.**Country A:**- The vertical axis represents price (P) and the horizontal axis represents quantity (Q).- The supply curve (S) slopes upward, and the demand curve (D) slopes downward.- The equilibrium price without trade is marked at P1.- The autarky price (domestic equilibrium) is at P2.- Area 'a' represents the consumer surplus at autarky, and area 'b' represents the producer surplus at autarky.**Country B:**- Similarly, the vertical axis represents price (P) and the horizontal axis represents quantity (Q).- The supply curve (S) and demand curve (D) intersect to determine the autarky price at P3.- Area 'c' represents the change in surplus due to price differences in trade, while area 'd' represents additional surplus change with free trade.**Choices for Interpretation:**1. The autarky price in Country A is P2.2. Country B has a comparative advantage in this good.3. Moving from autarky to free trade makes suppliers in Country A worse off by the amount of a+b.4. Moving from autarky to free trade makes demanders in Country B better off by the amount of c+d.

Explanation: Соuntry А is exроrting beсаuse dоmestiс рriсe is less thаn the wоrld рriсe.…

Answered: The diagram below shows supply and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose Country X exports good A and imports good B. And, Country Y exports good B and imports good A. When country Y imposes an import tariff, what happens to the terms of trade in these countries and what is the impact of this on economic welfare (assume no other factor determines economic welfare).
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Based on Figure 1, choose the correct statement. Assume that Nation 2 a small country and imposes a tariff on imports of X. Figure 1. Partial equilibrium analysis effects of a tariff in Nation 2 P,($) Ars 0 |A C 10 J 'M *- 20 30 40 50 60 D, 70 80 1) Nation 2 faces a perfectly inelastic import supply at the world price of Pw = 2 and it can import any quantity of X. 2) Nation 2 faces a perfectly elastic import supply at the world price of Pw = 2 and it can import any quantity of X. 3) Nation 2 faces a perfectly elastic export supply at the world price of Pw = 1 and it can import any quantity of X. 4) Nation 2 faces a perfectly inelastic export supply at the world price of Pw = 1 and it can import any quantity of X.
Referring to the graph above, if the world price is $8, consumer surplus (relative to the no trade situation): A. Increases by $60, and producer surplus decreases by $120 B. Increases by $80, and producer surplus increases by $80 C. Decreases by $60, and producer surplus decreases by $80 D. Decreases by $80, and producer surplus increases by $120
On the following graph, use the green point (triangle symbol) to shade consumer surplus in Cambodia after China's clothing industry expands. Then use the purple point (diamond symbol) to shade producer surplus. Market for Clothing in Cambodia Domestic Demand Consumer Surplus Domestic Supply New World Price Producer Surplus Quantity of Clothing Price of Clothing
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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.
The world price of a ton of steel is $100. The price of a ton of steel in Mexico was $250 before opening the economy to trade. After Mexico opened the economy to trade, Mexico began O exporting steel and the price of steel in Mexico decreased to $100. O Importing steel and the price of steel in Mexico remained at $250. O importing steel and the price of steel in Mexico decreased to $100. O exporting steel and the price of a steel in Mexico remained at $250
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
You are watching the nightly news. A political candidate being interviewed says, "I'm for free trade, but it must be fair trade. If our foreign competitors will not raise their environmental regulations, reduce subsidiaries to their export industries, and lower tariffs on their imports of our goods, we should retaliate with tariffs and import quotas on there goes to show them that we won't be played for fools!" A) If a foreign country artificially lowers the cost of production for its producers with lax environmental regulations and direct subsidiaries and then exports the products to us, who gains and who loses in our country, producers or consumers? B) Continuing form part A above, does our country gain or lose? Why? C) If a foreign country subsidizes the production of a good exported to the United States, who bears the burden of their mistaken policy? D) What happens to our overall economic well-being if we restrict trade with a country that subsidizes its export industries?…
Which of the following statements is false? Question 7Answer a. If the United States imposes a tariff on Japanese car imports, the price of cars in the United States is likely to increase. b. If Japan imposes a quota on car exports to the United States, the price of cars in the United States is likely to increase. c. If the United States imposes a quota on Japanese car imports, the price of cars in the United States is likely to increase. d. If Japan imposes a subsidy on car exports to the United States, the price of cars in the United States is likely to increase.
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 Pw 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 s and Kenya will import tons of…

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