Question 43The production side efficiency loss of a tariff is caused byO the contraction of domestic consumption.O higher profits gained by foreign producers.the increase in government revenue.the expansion of relatively inefficient domestic production.

Tariffs are used to impose import restrictions. Simply expressed, they raise the price of…

Answered: The production side efficiency loss of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The demand and supply functions for a product in a large country are given as Qd = 130 – 3P and Qs = -30 + 2P respectively. The world price is 20$ and the large country imposes an ad valorem tariff of %50. After the imposition of tariff world price decreases to 16$. Calculate the change in consumer surplus, producer surplus, government revenue and social welfare after the imposition of tariff.
Imposition of an import tariff leads to Group of answer choices reduction in consumer surplus deadweight loss efficiency loss All of these are true
When a country opens its markets to international trade, if the world price is ________(lower/higher) than the domestic equilibrium price, quantity supplied from foreign producers will rise.
Price per Saddle Domeslic Supply P2 Tariff World Price P1 G Domestic Demand Q1 Q2 Q3 Q4 Quantity of Saddles With the tariff in place, the total tax revenue equals O (1/2)x(Q2-Q1)x(P2-P1) + (1/2)x(Q4-Q3)x(P2-P1) O P2 x Q3 (P2 - P1) x (Q3 - Q2) O (P2 - P1) x (Q4 - Q1)
If a large country pays a subsidy to its producers of a product, Group of answer choices Foreign countries that are net exporters of the product lose. Foreign consumers lose. Foreign producers gain. Foreign countries that are net importers of the product lose.
Tariffs and quotas are costly to consumers because О Multiple Choice consumers have to switch to higher-priced domestic goods. the price of the imported good falls. the supply of the imported good increases. import competition increases for domestic goods.
(a) Draw an offer curve for Guatemala that shows its offer of coffee for wheat. Include both an elastic and inelastic range in Guatemala’s offer curve. (b) Draw an offer curve for the United States that shows its offer of wheat for coffee. Show this US curve intersecting the Guatemalan offer curve in the inelastic range of the Guatemalan curve. Note the equilibrium terms of trade established. (c) Compare the equilibrium international price you found in question (b) to the autarky prices in Guatemala and in the United States. (You can find a country’s autarky price by drawing a line tangent to the offer curve at the origin.) Explain which country benefits the most from a more favorable movement in its terms of trade when it abandons its autarky position. (d) “The Guatemalan offer curve is likely to be less elastic than the US offer curve.” Justify this claim by explaining what factors determine the elasticity of an offer curve.
Regulating a Free Trade market by imposing a Tariff results in (a) benefit to domestic producers with no impact on domestic consumers. benefit to domestic consumers with no impact on domestic producers. benefits to both domestic producers and domestic consumers. benefit to domestic producers at the expense of domestic consumers. benefit to domestic consumers at the expense of domestic producers.
International trade benefits the exporter at all times and sometimes also the importer. both the exporter and the importer. only the importer. only the exporter. neither the exporter nor the importer. A tax on a good that is imposed by the importing country is called a licensing regulation. trade constraint. quantitative restriction. nontariff barrier. tariff. In the wake of worsening relations with China, some Americans called for an increase in tariffs on Chinese products coming into America. If higher tariffs are imposed on clothing produced in China, the price of clothing in America would not change. first decrease then increase. increase. decrease. first increase then decrease. If the government decides to impose a new tariff on orange juice from Brazil, the tariff would lead to ________ the tariff revenue collected by the U.S. government. a decrease in making illegal no change in an increase in an elimination of If a tariff…
The effective rate of protection measures * the quota equivalent value of a tariff. the efficiency with which the tariff is collected at the customhouse. the difference between domestic and foreign prices of the import. the protection given by the tariff to domestic value added. the "true" ad valorem value of a tariff. The deadweight loss of a tariff * is not a social loss because it is paid for by rich corporations. is not a social loss because it aids domestic consumers. is a social loss because it reduces the revenue of the government. is not a social loss because it merely redistributes revenue from one sector to another. is a social loss because it promotes inefficient use of national resources.
A country imposing a tariff can benefit in terms of social welfare if The terms-of-trade benefit exceeds the sum of production and consumption distortion loss. The tariff revenue exceeds the sum of production and consumption distortion loss. The consumer surplus loss is less than the producer surplus gain. The terms-of-trade benefit exceeds the consumer surplus loss.
The primary gain from trade is: more goods than would be attainable through domestic production alone. increased employment in the domestic export sector. tariff revenue. increased employment in the domestic import sector.

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The production side efficiency loss of a tariff is caused by the contraction of domestic consumption. higher profits gained by foreign producers. the increase in government revenue. the expansion of relatively inefficient domestic production.