The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. 12 11 10 9 8 1654321 A O B World price + tariff - World price Domestic demand 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Q с Domestic supply Di EF Refer to the above figure. The tariff O decreases producer surplus by the area C and decreases consumer surplus by the area C+D+E+F O decreases producer surplus by the area C + D and decreases consumer surplus by the area D+E+F O increases producer surplus by the area C and decreases consumer surplus by the area C+D+E+F O increases producer surplus by the area B + C and decrease consumer surplus by the area D+E+F

The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. 12 11 10 9 8 1654321 A O B World price + tariff - World price Domestic demand 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Q с Domestic supply Di EF Refer to the above figure. The tariff O decreases producer surplus by the area C and decreases consumer surplus by the area C+D+E+F O decreases producer surplus by the area C + D and decreases consumer surplus by the area D+E+F O increases producer surplus by the area C and decreases consumer surplus by the area C+D+E+F O increases producer surplus by the area B + C and decrease consumer surplus by the area D+E+F

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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33. a) At $800 price, how many units of good X will the domestic consumers purchase from *domestic suppliers*? ___________ units. b) At $800 price, how many units of good X will have to be imported from abroad? _________ units. c) At $800 price what is government's tax revenue from tariff on good X imported? $________________. d) With no tariff, how many units of good X can domestic suppliers supply? ___________ units e) With no tariff, how many units of good X will the domestic consumers demand?_______________ units.
2. Welfare effects of a tariff in a small country Suppose Guatemala is open to free trade in the world market for oranges. Since Guatemala is small relative to the international market, the demand for and supply of oranges in Guatemala have no impact on the world price. The following graph shows the domestic market for oranges in Guatemala. The world price of a ton of oranges is Pw = $350. 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). PRICE (Dollars per ton) 710 Domestic Demand Domestic Supply 670 630 590 550 510 470 430 28 8 8 8 8 8 8 8 390 350 P. 310 0 15 30 45 60 75 90 105 120 135 150 QUANTITY (Tons of oranges) CS PS Because Guatemala participates in international trade in the market for oranges, it will import tons of oranges. Now suppose the Guatemalan…
1. What do the welfare effects of an import quota differ from those of import tariff?
4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for wheat in New Zealand. The world price (Pw) of wheat is $255 per bushel and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of wheat and that there are no transportation or transaction costs associated with international trade in wheat. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. PRICE (Dollars per bushel) 480 Domestic Demand 455 430 405 380 355 330 305 280 255 230 0 " 30 Domestic Supply 60 90 120 150 180 210 QUANTITY (Bushels of wheat) ++ PW 240 270 300 ?
Price of Rice $/ton €140 €120 €100 с a b rise by 40 units. 80 120 160 200 240 300 Quantity of Rice rise by 40 units. e The graph above reflects the market for rice in Spain. If the world price is 100euros and the government imposes a 20% tax on imports the amount of imports will S drop by 40 units. drop by 80 units.
. Identify people and organizations that benefit from and suffer because of the tariff (2 points). Include how the tariff will impact your compan
Give explanation also please
The graphs below show domestic supply and demand curves for a good in two countries, with prices measured in the same currency. If these are the only two countries in the world and if they open to free international trade, O. Demanders of the good in Country A will benefit from trade. O. Suppliers of the good in Country A will benefit from trade. O. The welfare of Country A as a whole will fall. O. The quantity of the good demanded in Country B will become larger. O. The price of the good in both countries will be the one labeled PB.
12 11 10 9 8 7 6 2 G A B The tariff Di E F Domestic supply World price + tariff World price Domestic demand 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Q O decreases producer surplus by the area C. O increases producer surplus by the area C. O decreases producer surplus by areas C, D, E and F. O increases producer surplus by the area C + G.
The U.S. is an importer of ethanol, and let’s assume they are a price-taker in the world market. Suppose that a technological advance in ethanol production in Brazil, the world’s largest exporter, drives down the world price of ethanol by $5. Draw a graph and explain how this change in world price affects consumer surplus, producer surplus, and total surplus in the U.S. market. Now suppose the U.S. government institutes an import tariff of $5 in response to the fall in the world price. On your graph label the revenue raised by the tariff and the deadweight loss created (if it exists). Who is likely to support this policy? Suppose that the fall in price is attributable not to a technological advance but to a subsidy from the Brazilian government to Brazilian ethanol producers. How would this affect your analysis?
Price per Saddle Domeslic Supply A B. P2 World Price Tariff P1 G Domestic Demand Q1 Q2 Q3 Q4 Quantity of Saddles Before the tariff is implemented, what is the size of consumer surplus? O A OA + B OA+B+ C + D + E + F OG+C
Price P1 D 01 Quantity The graph above shows domestic supply and demand with trade in a SMALL country. With trade, this country can purchase at the world price, Pw. Suppose that this country imposes a $5 per unit tariff on this good. Which of the following is true? O There will not be deadweight losses due to this tariff, since it is a small country. The domestic price will rise by $5. O Consumers will be better off. Producers will not increase domestic production.