The following graph shows the domestic supply of and demand for maize in Guatemala. The world price (Pr) of maize is $255 per ton 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 maize and that there are no transportation or transaction costs associated with international trade in maize. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 435 Domestic Demand Domestic Supply 415 305 375 355 335 315 295 275 Pw W 255 + 235 0 40 80 120 100 200 240 280 320 300 400 QUANTITY (Tons of maize) If Guatemala is open to international trade in maize without any restrictions, it will import. tons of maize. per ton will Suppose the Guatemalan government wants to reduce imports to exactly 80 tons of maize to help domestic producers. A tariff of S achieve this. A tariff set at this level would raise S in revenue for the Guatemalan government. The following table shows data on consumption, investments, exports, imports, and government expenditures for the United States in 2011, as published by the Bureau of Economic Analysis. All figures are in billions of dollars. Fill in the missing cells in the table to calculate GDP using the expenditure approach. Data (Billions of dollars) Consumption (C) 10,279.0 Investment (I) 1,854.9 Exports (X) 2,094.2 Imports (M) 2,662.3 Net Exports of Goods and Services Government Purchases (G) 3,059.8 Gross Domestic Product (GDP) PRICE (Dollars per ton)
The following graph shows the domestic supply of and demand for maize in Guatemala. The world price (Pr) of maize is $255 per ton 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 maize and that there are no transportation or transaction costs associated with international trade in maize. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 435 Domestic Demand Domestic Supply 415 305 375 355 335 315 295 275 Pw W 255 + 235 0 40 80 120 100 200 240 280 320 300 400 QUANTITY (Tons of maize) If Guatemala is open to international trade in maize without any restrictions, it will import. tons of maize. per ton will Suppose the Guatemalan government wants to reduce imports to exactly 80 tons of maize to help domestic producers. A tariff of S achieve this. A tariff set at this level would raise S in revenue for the Guatemalan government. The following table shows data on consumption, investments, exports, imports, and government expenditures for the United States in 2011, as published by the Bureau of Economic Analysis. All figures are in billions of dollars. Fill in the missing cells in the table to calculate GDP using the expenditure approach. Data (Billions of dollars) Consumption (C) 10,279.0 Investment (I) 1,854.9 Exports (X) 2,094.2 Imports (M) 2,662.3 Net Exports of Goods and Services Government Purchases (G) 3,059.8 Gross Domestic Product (GDP) PRICE (Dollars per ton)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The following graph shows the domestic supply of and demand for maize in Guatemala. The world price (Pr) of maize is $255 per ton 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 maize and that there are no transportation or transaction costs associated with international trade in maize. Also, assume that domestic
suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place.
435
Domestic Demand
Domestic Supply
415
305
375
355
X
335
315
295
275
Pu W
255
235
0 40
80
300 400
120 100 200 240 280 320
QUANTITY (Tons of maize)
If Guatemala is open to international trade in maize without any restrictions, it will import.
tons of maize.
per ton will
Suppose the Guatemalan government wants to reduce imports to exactly 80 tons of maize to help domestic producers. A tariff of S
achieve this.
A tariff set at this level would raise $
in revenue for the Guatemalan government.
The following table shows data on consumption, investments, exports, imports, and government expenditures for the United States in 2011, as
published by the Bureau of Economic Analysis. All figures are in billions of dollars.
Fill in the missing cells in the table to calculate GDP using the expenditure approach.
Data
(Billions of dollars)
Consumption (C)
10,279.0
Investment (I)
1,854.9
Exports (X)
2,094.2
Imports (M)
2,662.3
Net Exports of Goods and Services
Government Purchases (G)
3,059.8
Gross Domestic Product (GDP)
PRICE (Dollars per ton)
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