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what is tariff and how does it effect the economy
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- 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…Because Zambia participates in international trade in the market for soybeans, it will import tons of soybeans. Now suppose the Zambian government decides to impose a tariff of $10 on each imported ton of soybeans. Under the tariff, the price Zambian consumers pay for a ton of soybeans becomes , and Zambia will import tons of soybeans. Use the following graph to show the effects of the $10 tariffSuppose you are analyzing a tariff on cotton shirts world price per shirt is 20 the government has decided to charge a tariff 10 per shirt buyers demand 80 and sellers supply 25 what is tariff revenue that the government receives Pls if you you use hand writing make sure it’s understandable
- Tariffs can help or hurt the economy explain the Hawley-Smoot Act with this in mind.If a country removes a tariff on imported shoes, we expect the domestic price of shoes to and the number of shoes consumed in the domestic market to a. fall; fall b. fall; rise c. rise; fall d. rise: riseRecently, US imposed new tariffs on Canadian softwood lumber. Lumber is intensively used in the construction and renovation projects for single-family homes. US Mkt. for lumber. Pw is the price of lumber available to domestic construction firms before the imposition of tariffs. On the graph, show (1) the price of lumber with tariff (PT); (2) quantity of lumber produced by domestic producers (Qsd); (3) quantity of lumber bought by domestic construction firms (Qdd); (4) quantity of lumber imported (IM); (5) revenue from tariff (TR); (6) Tariff deadweight loss (DWL). (5) With up/down arrows, indicate the change in the price of lumber available to domestic construction firms___, quantity of lumber available to domestic construction firms__ , quantity of lumber produced in the US__. In the market for lumber: 1. (10%) Label clearly the supply and demand curves, S and D, and . 2. (60%) On the graph, construct and label clearly (1) the price after the introduction of the tariff (PT) (2)…
- The UK has imposed new tariffs on imported leather shoes from China and Vietnam, the decision to impose the new duties was made after a probe suggested that shoe manufacturers in the Asian countries were receiving “disguised subsidies” from their governments and are exporting shoes at below cost price. Explain using a diagram, how will the imposition of this tariff affect the UK economy.2 Using the graph, assume that the government imposes a $1 tariff on solar panels. Answer the following questions given this information. Price $13 65 8 Domestic Supply $1.00 Tariff World Price Domestic Demand о 30 40 60 84 96 Quantity a. What is the domestic price and quantity demanded of solar panels after the tariff is imposed? b. What is the quantity of solar panels imported before the tariff? c. What is the quantity of solar panels imported after the tariff? d. What would be the amount of consumer surplus before the tariff? e. What would be the amount of consumer surplus after the tariff? f. What would be the amount of producer surplus before the tariff? g. What would be the amount of producer surplus after the tariff? h. What would be the amount of government revenue because of the tariff? i. What would be the total amount of deadweight loss due to the tariff?The figure below illustrates a tariff. On the graph, Q represents quantity and P represents price. 12 16987654321 10 G с A Di B E F Domestic supply World price + tariff - World price Domestic demand 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Q Refer to the above figure. The tariff decreases producer surplus by the area C and decreases consumer surplus by the area C + D + E + F. O decreases producer surplus by the area C+D and decreases consumer surplus by the area D + E + F O increases producer surplus by the area C and decreases consumer surplus by the area C+D+E+F O increases producer surplus by the area B + C and decrease consumer surplus by the area D + E + F
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