Microeconomics
10th Edition
ISBN: 9781259655500
Author: David C Colander
Publisher: McGraw-Hill Education
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Question
Chapter 10, Problem 3QE
To determine
Difference between the effects of tariff and quota.
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Explain why a quota may result in lower total surplus in the home country than a tariff, even if they have the same effect on imports and the domestic price.
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Chapter 10 Solutions
Microeconomics
Ch. 10.1 - Prob. 1QCh. 10.1 - Prob. 2QCh. 10.1 - Prob. 3QCh. 10.1 - Prob. 4QCh. 10.1 - Prob. 5QCh. 10.1 - Prob. 6QCh. 10.1 - Prob. 7QCh. 10.1 - Prob. 8QCh. 10.1 - Prob. 9QCh. 10.1 - Prob. 10Q
Ch. 10 - Prob. 1QECh. 10 - Prob. 2QECh. 10 - Prob. 3QECh. 10 - Prob. 4QECh. 10 - Prob. 5QECh. 10 - Prob. 6QECh. 10 - Prob. 7QECh. 10 - Prob. 8QECh. 10 - Prob. 9QECh. 10 - Prob. 10QECh. 10 - Prob. 11QECh. 10 - Prob. 12QECh. 10 - Prob. 13QECh. 10 - Prob. 14QECh. 10 - Prob. 1QAPCh. 10 - Prob. 2QAPCh. 10 - Prob. 3QAPCh. 10 - Prob. 4QAPCh. 10 - Prob. 5QAPCh. 10 - Prob. 1IPCh. 10 - Prob. 2IPCh. 10 - Prob. 3IPCh. 10 - Prob. 4IPCh. 10 - Prob. 5IPCh. 10 - Prob. 6IPCh. 10 - Prob. 7IPCh. 10 - Prob. 8IP
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Similar questions
- Show graphically that for any tariff, there is an equivalent quota that would give the same result. What would be the difference, then, between the two types of trade barriers? Hint: It is not something you can see from the graph.arrow_forwardOne advantage of a tariff over a quota, from the perspective of the nation imposing it, is that a tariff decreases the domestic price increases the quantity of imports decreases the quality of imports raises tax revenuearrow_forwardUsing an appropriate diagram, explain and illustrate the overall welfare effects of a tariff and a quota on a small countryarrow_forward
- Why would an importing country use a tariff rather than a quota?arrow_forwardAre there any differences between a specific tariff and a quota as a policy instrument on a national economy in terms of affecting mechanisms and welfare effects? Please explain.arrow_forward4. 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 (?)arrow_forward
- Whatever can be done by a tariff can be done by a quota.arrow_forwardWhen a large country imposes a tariff for a certain good it imports,it often affects the foreign price of the good as well. Is this statement true? Justify the answerarrow_forwardThe demand for cameras in a certain country is given by D = 8000 – 30P, where P is the price of acamera. Supply by domestic camera producers is S = 4000 + 10P. If this economy opens to tradewhile the world price of a camera is $50, and the government imposes a tariff of $30 per camera,what will be the quantity of cameras that this country imports or exports?arrow_forward
- In 2019, Japan had a tariff on canola oil imports from Canada of 13.2 yen per kg. This same year, Japan imported approximately 35 million kg of canola oil from Canada. How much tariff revenue did the Japanese government generate in 2019? (Do not include the extra zeros for millions in your answer.)arrow_forwardUnder what conditions could an import quota and a tariff have have exactly the same effect on price and bring the same gain and losses ( given a tariff level that restricts imports just as much as the quota would)?arrow_forwardCarefully explain how the imposition of a tariff is different for a large country (that can affect the world price) than a small country. Show your work graphically and explain in words.arrow_forward
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