The following tables show the domestic supply and demand schedules for bushels of flaxseed (used as an edible oil and a nutrition supplement) in the United States and Kazakhstan, with prices measured in U.S. dollars and quantities measured in millions of bushels. U.S.: Price $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 QD 12 11 10 9 8 7 6 5 Qs 0 1 2 3 4 5 6 7 +∞ 4 3 8 9 Kazakhstan: Price $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 QD 5.5 5 4.5 4 3.5 3 2.5 2 1.5 1 Qs 1.5 3 4.5 6 7.5 9 10.5 12 13.5 15 e. Suppose the sellers of flaxseed in the importing country successfully lobby for protection in the form of a $4 tariff per bushel of flaxseed. Describe the impact of this tariff on flaxseed trade and on the consumer and producer surpluses you calculated in part d. How much deadweight loss does this tariff generate? Calculate the following with the tariff in place. Number of bushels traded: million Kazakh seller's price: $ per bushel U.S. buyer's price: $ For the next four calculations, you are asked to determine the change in the value when the policy changes from free trade to restricted trade with the tariff. The benefits and losses of restricted trade (versus no trade) are than for free trade. i. Kazakh buyers' consumer surplus: $ million ii. Kazakh sellers' producer surplus: $ million iii. U.S. buyers' consumer surplus: $ million iv. U.S. sellers' producer surplus: $ million Deadweight loss of the tariff: $ million
The following tables show the domestic supply and demand schedules for bushels of flaxseed (used as an edible oil and a nutrition supplement) in the United States and Kazakhstan, with prices measured in U.S. dollars and quantities measured in millions of bushels. U.S.: Price $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 QD 12 11 10 9 8 7 6 5 Qs 0 1 2 3 4 5 6 7 +∞ 4 3 8 9 Kazakhstan: Price $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 QD 5.5 5 4.5 4 3.5 3 2.5 2 1.5 1 Qs 1.5 3 4.5 6 7.5 9 10.5 12 13.5 15 e. Suppose the sellers of flaxseed in the importing country successfully lobby for protection in the form of a $4 tariff per bushel of flaxseed. Describe the impact of this tariff on flaxseed trade and on the consumer and producer surpluses you calculated in part d. How much deadweight loss does this tariff generate? Calculate the following with the tariff in place. Number of bushels traded: million Kazakh seller's price: $ per bushel U.S. buyer's price: $ For the next four calculations, you are asked to determine the change in the value when the policy changes from free trade to restricted trade with the tariff. The benefits and losses of restricted trade (versus no trade) are than for free trade. i. Kazakh buyers' consumer surplus: $ million ii. Kazakh sellers' producer surplus: $ million iii. U.S. buyers' consumer surplus: $ million iv. U.S. sellers' producer surplus: $ million Deadweight loss of the tariff: $ million
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
am. 111.
Transcribed Image Text:The following tables show the domestic supply and demand schedules for bushels of flaxseed (used as an edible oil and a
nutrition supplement) in the United States and Kazakhstan, with prices measured in U.S. dollars and quantities measured in
millions of bushels.
U.S.:
Price
$2 $4
$6
$8
$10
$12
$14
$16
$18
$20
QD
12
11
10
9
8
7
6
5
Qs
0
1
2
3
4
5
6
7
+∞
4
3
8
9
Kazakhstan:
Price
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
QD
5.5
5
4.5
4
3.5
3
2.5
2
1.5
1
Qs
1.5
3
4.5
6
7.5
9
10.5
12
13.5
15
e. Suppose the sellers of flaxseed in the importing country successfully lobby for protection in the form of a $4 tariff per bushel
of flaxseed. Describe the impact of this tariff on flaxseed trade and on the consumer and producer surpluses you calculated in
part d. How much deadweight loss does this tariff generate?
Calculate the following with the tariff in place.
Number of bushels traded:
million
Kazakh seller's price: $
per bushel
Transcribed Image Text:U.S. buyer's price: $
For the next four calculations, you are asked to determine the
change in the value when the policy changes from free trade
to restricted trade with the tariff.
The benefits and losses of restricted trade (versus no
trade) are
than for free trade.
i. Kazakh buyers' consumer surplus: $
million
ii. Kazakh sellers' producer surplus: $
million
iii. U.S. buyers' consumer surplus: $
million
iv. U.S. sellers' producer surplus: $
million
Deadweight loss of the tariff: $
million
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