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There is evidence that the UK China import tariff escalation has affected factor prices in both countries.
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- Under what circumstances would the declining or dying industry argument for establishing barriers to imports be valid? What measures(s) is/are more efficient than an import tariff if maintaining current production level is the goal of government policy? (In your answer, justify those measure(s) by comparing with import tariff).In the Melitz (2003) model gains from trade only increase producer rents (make firms more profitable). True FalseQuotas may affect the terms of trade of the country imposing them. The effect of quotas on the terms of tradedepends upon the elasticity of the foreign offer curves. True False
- 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.China placed tariffs on the importation of US soybeans. Assume that the domestic market for soybeans in China is described by the following equations: Demand: P = 11.5 – Q Supply: P = 5.5 + Q Price is in 10 Yuan (¥) per bushel of soybeans and the units for Quantity are 100 million bushels per year. This is to make graphing simpler. This does NOT mean that the price is 10 and quantity is 100. Rather it means that if the price was 40¥ and the quantity was 7,500,000,000 bushels, this would plot as 4 and 7.5 respectively. The world price for soybeans is ¥65/bushel (this would graph as a horizontal line at 6.5). Graph the soybean market in China showing equilibrium both with no barriers to trade and with a ¥15/bushel tariff. Be sure to fully and clearly label the graph including: Domestic Demand curve (D), Domestic Supply curve (S), the World Price (WP), and the Price with tariffs (PT), along with the quantities imported both with and without the tariff. Based on your graph, what…The following graph shows the domestic supply of and demand for wheat in Bangladesh. The world price (Pw) of wheat is $245 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. 515 Domestic Demand Domestic Supply 485 455 425 395 365 + 335 305 275 P W 245 215 10 20 30 40 50 80 70 80 90 100 QUANTITY (Bushels of wheat) PRICE (Dollars per bushel)
- 4. A graphical comparison of tariffs and quotas Alagir and Ertil are small countries that protect their economic growth from rapidly advancing globalization by limiting the import of rugs to 20 million. To this end, each country imposes a different type of trade barrier when the world price (Pw) is $3,000. In Alagir, the government decides to impose a tariff of $2,000 per rug; in Ertil, the government implements a quota of 20 million rugs. Assume that Alagir and Ertil have identical domestic demand (Do) and supply (S) curves for rugs as shown on the following graph. Under these conditions, the price of rugs is $5,000 per rug in each country. PRICE (Dolars per rug) 10000 9000 8000 7000 8000 5000 4000 3000 2000 1000 D 0 P.. 10 D₂ * 20 D₁ XX ☆ XX 40 30 50 60 70 QUANTITY (Millions of rugs) S 80 90 100 (?)Which of the following might be considered a cost to protecting domestic jobs in the steel producing industry by blocking steel imports? Less consumer surplus for those who use products made of domestic steel Fewer jobs in industries that use steel Higher prices of steel for domestic industries that use steel All of these might be considered costsExplain and evaluate the theoretical and practical case for and against liberalizing international trade in the context of Australian resource endowments and trade policies
- 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 SHRINKING STEEL INDUSTRY Few industries have been harder hit by rising imports – and have made greater demands at the political level – than the steel industry. Its persistence apparently paid off when, in March 2002, George W. Bush agreed to impose a tariff of up to 30% on steel imports. The steel industry claimed that was barely enough to offset the combination of a stronger dollar and ‘‘dumping’’ by steel companies around the world because of a glut of excess capacity. It also requested, but did not receive, money from the government to pay the retirement and healthcare benefits for those pensioners who had received generous benefits when the industry was profitable. Without jettisoning this cost, the industry claimed, it could not consolidate and hence become competitive against worldwide competition. The positive impacts of such a move to employers and shareholders of the steel industry are obvious. But what about the negative impacts?…Illustrate clearly the deadweight loss created by imposing an import quota that limits sugar imports into the US to q* . Assume the market for sugar was competitive before the import restrictions were imposed.
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