The diagram shows export tax by a large country in perfect competition. The graph shows the effect of export tax by a large country under perfect competition. The graph shows price on the vertical axis and output on the horizontal axis. It has three curves: 1) a downward sloping world demand curve labeled "D" +Dw". 2) a downward sloping domestic demand curve labeled "D" that starts at the same point on the vertical axis as the world demand curve but has a steeper slope than the world demand curve. 3) an upward sloping supply curve (Supply). At the point where the supply curve and the world demand curve intersect, price equals $9 (the free-trade price) and the quantity supplied equals 30. The new international price under export tax, pw2, equals $12. The price that consumers pay under export tax equals, pw2-t, equals $7. When price is $9, the quantity supplied equals 30 and the quantity demanded domestically equals 10. When price is $7, the supplied equals 25 and the quantity domestically demanded equals 15. Price p2-$12 P = $9 p2-t-S7 1)-$25 2) $65 3) -$85 10 4) $25 15 25 5) None of the above 30 D4 diagram, the change in consumer surplus due to the export tax equals Supply X D+D Based on the

The diagram shows export tax by a large country in perfect competition. The graph shows the effect of export tax by a large country under perfect competition. The graph shows price on the vertical axis and output on the horizontal axis. It has three curves: 1) a downward sloping world demand curve labeled "D" +Dw". 2) a downward sloping domestic demand curve labeled "D" that starts at the same point on the vertical axis as the world demand curve but has a steeper slope than the world demand curve. 3) an upward sloping supply curve (Supply). At the point where the supply curve and the world demand curve intersect, price equals $9 (the free-trade price) and the quantity supplied equals 30. The new international price under export tax, pw2, equals $12. The price that consumers pay under export tax equals, pw2-t, equals $7. When price is $9, the quantity supplied equals 30 and the quantity demanded domestically equals 10. When price is $7, the supplied equals 25 and the quantity domestically demanded equals 15. Price p2-$12 P = $9 p2-t-S7 1)-$25 2) $65 3) -$85 10 4) $25 15 25 5) None of the above 30 D4 diagram, the change in consumer surplus due to the export tax equals Supply X D+D Based on the

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 6PA

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