Answer in all option The nation of Acirema is "small" and unable to affect world prices. It imports peanuts at the price of $10 per bag. The demandcurve isThe supply curve isD 400 10P.S=50+5P.Determine the free trade equilibrium. Then calculate and graph the following effects of an import quota that limits imports to 50bags.a. The increase in the domestic price.b. The quota rents.c. The consumption distortion loss.d. The production distortion loss.

The Free Trade Equilibrium for Acirema's peanut market using the given demand and supply…

Answered: The nation of Acirema is "small" and…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 8PA

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Explain how a subsidy on agricultural goods like sugar adversely affects the income of foreign producers of imported sugar.
Explain how a tariff reduction causes an Increase in the equilibrium quantity of imports and a decrease in the equilibrium price. Hint: Consider the Work It Out Effects of Trade Barriers.
Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The demand (d) and supply (s) for cameras In Thailand and Japan is described by the following functions: QsT=-5+14P QsJ=-10+14P QdT=60-P QdJ=80-P P is the price measured in a common currency used in both countries, such as the Thai Baht. Compute the equilibrium price (P) and quantities in each country without trade. Now assume that free trade occurs. The free-trade price goes to 56.36 Baht. Who exports and Imports cameras and in what quantities?
3. The world price of sugar is $.10 per lb., but import quotas raise the U.S. price to $.225 per lb. a. Compute the tariff equivalent of the quota (as a percent of the world price). b. Due to the high price of sugar in the U.S., high fructose corn sweetener emerges as an economic substitute for sugar. As a result it is expected that the demand for sugar will fall over time. From the perspective of the U.S. sugar industry, are they better off with tariff protection, or a quota which is equivalent today, but which stays fixed over time? Explain using a supply and demand diagram in your answer.
plz help Assume country A produces and consumes cupboards. The autarky price of a cupboard in country A is USD100 and the domestic production and consumption in the absence of trade is 160 units. Assume further that the free trade of cupboards is USD40, explain the partial equilibrium effect of a 50% tariff imposed by Country A on cupboards.
A5
a. In the absence of trade, what is the equilibrium price and equilibrium quantity?b. The government opens the wheat market to free trade and U.S enters the Turkish market,pricing wheat at $40 per ton. What will happen to the domestic price of wheat? What will bethe new domestic quantity supplied and domestic quantity demanded? How much wheat willbe imported from U.S?c. The government imposes a $10 per ton tariff on all imported wheat. What will happen tothe domestic price of wheat? What will be the new domestic quantity supplied and domesticquantity demanded? How much wheat will now be imported from U.S?d. How much revenue will the Turkish government receive from the $10 per ton tariff?
a. In the absence of trade, what is the equilibrium price and equilibrium quantity? b. The government opens the wheat market to free trade and U.S enters the Turkish market, pricing wheat at $40 per ton. What will happen to the domestic price of wheat? What will be the new domestic quantity supplied and domestic quantity demanded? How much wheat will be imported from U.S? c. The government imposes a $10 per ton tariff on all imported wheat. What will happen to the domestic price of wheat? What will be the new domestic quantity supplied and domestic quantity demanded? How much wheat will now be imported from U.S? d. How much revenue will the Turkish government receive from the $10 per ton tariff?
7. Consider a country that imports a good from abroad.For each of following statements, state whether it istrue or false. Explain your answer.a. “The greater the elasticity of demand, the greaterthe gains from trade.”b. “If demand is perfectly inelastic, there are no gainsfrom trade.”c. “If demand is perfectly inelastic, consumers donot benefit from trade.”
The figure below shows the hypothetical domestic supply and demand for baseball caps in the country of Spain. Domestic Supply and Demand for Baseball Caps Spain Price (€ per cap) 10 X 10 20 30 40 50 60 70 80 90 100 9 8 7 5 3 2 1 0 Sd Dd
donetic P Tariff Tar Revenue Damestic Quantity b. What are the price-quantity effects of this tariff on the following? (Assume the country imposing the tariff is a small part of the world market) Domestic consumers: Price will (Click to select) and quantity will (Cick to select) v Domestic producers: Price will (Cick to select) and quantity will [(Clck to select) v Foreign exporters: Price will (Click to select) and quantity will (Cick to select) Price
Domestic Supply and Demand for Baseball Caps Spain 10 8. 7. 4 10 20 30 40 50 60 70 80 90 100 Baseball caps (thousands per month) Suppose that the world price of baseball caps is €1 and there are no import restrictions on this product. Assume that Spanish consumers are indifferent between domestic and imported baseball caps. Instructions: Enter your answers as whole numbers. a. What quantity of baseball caps will domestic suppliers supply to domestic consumers? 10 thousand b. What quantity of baseball caps will be imported? 80 thousand Now suppose a tariff of €1 is levied against each imported baseball cap. c. After the tarif is implemented, what quantily of baseball caps will domestic suppliers supply to domestic consumers? 30 thousand d. After the tariff is implemented, what quantity of baseball caps will be imported? 40 thousand Price (€ per cap) 3.

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