What is a tariff? • A limit imposed on the production or sale of a product. • A maximum or minimum price placed on a product by government regulation. A restriction placed on the importation of foreign products. A tax or duty levied on imports. . .

What is a tariff? • A limit imposed on the production or sale of a product. • A maximum or minimum price placed on a product by government regulation. A restriction placed on the importation of foreign products. A tax or duty levied on imports. . .

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1 of What is the effect of a tariff on the market price? Select one: a. It keeps the price of the exported good the same as the world price. b. It raises the price of the imported good above the world price. c. It lowers the price of the exported good below the world price. d. It lowers the price of the imported good below the world price.
How does the imposition of an import tariff by a country affect its domestic market for the imported goods? A. It increases the domestic supply, leading. to lower prices. B. It decreases the domestic supply, leading to higher prices. C. It increases the domestic demand, leading to higher prices. D. It decreases the domestic demand, leading to lower prices.
The following is not the cost of the tariff a. area a b. area b c. area d d. area a+b+c+d
1. What do the welfare effects of an import quota differ from those of import tariff?
The US, the domestic country, is currently operating a price of $14 per hammer. The US and China are not engaging in international trade. A new treaty is signed, and the world price and domestic price of the product are now $10 per unit. The US producers claim that this new treaty will harm them. The world price of hammers is $10 per hammer before and after the treaty. A. Calculate the consumer surplus before international trade is allowed. Show your work. A. Calculate the consumer surplus after international trade is allowed. Show your work. C. Will the producers in the domestic economy support or argue against opening up to international trade? Briefly explain and support your answer.
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00 7 F. PRICE (Dollars per ton) 4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for soybeans in Honduras. The world price (Pw) of soybeans is $530 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 soybeans and that there are no transportation or transaction costs associated with international trade in soybeans. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 2. Domestic Demand Domestic Supply 770 740 710 680 650 620 06 P, 530 MacBook Pro Search or type URL 4. 51 9.
The Smoot-Hawley Act tried to divert consumer demand away from foreign products by Multiple Choice demanding local content requirements. O exporting more products to Europe. O subsidizing domestic businesses. O creating a trade deal with Canada and Mexico. O establishing tariff barriers.
Assume Australia is an importer of sofas and there are no trade restrictions. Australian consumers buy 1 000 000 sofas per year, of which 450 000 are produced domestically and 550 000 are imported.a Suppose that a technological advance among Swedish sofa manufacturers causes the world price of sofas to fall by $200. Draw a graph to show how this change affects the welfare of Australian consumers and Australian producers, and how it affects total surplus in Australia.b After the fall in price, Australian consumers buy 1 150 000 sofas, of which 300 000 are produced domestically and 850 000 are imported. Calculate the change in consumer surplus, producer surplus and total surplus from the price reduction.c If the government responded by putting a $200 tariff on imported sofas, what would this do? Calculate the revenue that would be raised and the deadweight loss. Would it be a good policy from the standpoint of Australian welfare? Who might support the policy?d Suppose that the fall in…
The box said higher or lower for the 1 question an OA. win: lose OB. lose: win OC. lose: lose OD. win: win The United States exports athletic coaching services and imports coffee. The price of athletic coaching services in the United States is without international trade. As a result of trade in athletic coaching services, U.S. producers of athletic coaching services and U.S. consumers of athletic coaching services Click to select your answer. Show Transcribed Text The box said higher or lower for the 1 question 5 OA win; lose OB. lose; win OC. win: win OD. lose; lose C 3 C The price of coffee in the United States is trade. As a result of trade in coffee, the U.S. producers of coffee with international trade than with international trade than without international and U.S. consumers of coffee T tri A
Price (dollars per ton) 1,000 800 600 400 200 0 1 2 3 4 5 D 6 Steel (millions of tons per year) The figure shows the market for steel in the United States. If the world price for a ton of steel is $200 per ton, how much steel does the United States import? Suppose the United States imposes a tariff of $400 per ton of steel. With this tariff, how much steel does the United States import? If it is possible to calculate the amount of the deadweight loss from the $400 per ton tariff, what is the amount? If it is not possible, explain why it is not possible to calculate it. Next suppose the United States imposes a tariff of only $200 per ton of steel. With this tariff, how much steel does the United States import? How much revenue does the government collect from this tariff? Finally, suppose that instead of a tariff the United States imposes a quota of 2 million tons of steel per year. Illustrate how the market changes with this quota. With the quota, what is the price of steel in the…