PRINCIPLES OF MICROECONOMICS (OER)
2nd Edition
ISBN: 9781947172340
Author: Timothy Taylor, Steven A. Greenlaw
Publisher: OpenStax
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Textbook Question
Chapter 20, Problem 36RQ
Why is trade a good thing if some people lose?
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After the ban is imposed, Joe’s firm switches to the more expensive biodegradable disposable cups. This increases the cost associated with each cup of coffee it produces.
Which cost curve(s) will be impacted by the use of the more expensive biodegradable disposable cups? Why? Which cost curve(s) will not shift, and why not? Please use the table below to answer this question. For the second column (“Impacted? If so, how?”), please use one of the following three choices: No shift; Shifts up (i.e., increases: at nearly any given quantity, the cost goes up); or Shifts down (i.e., decreases: at nearly any given quantity, the cost goes down). $
Cost Curve
Impacted? If so, how?
Explanation of the Shift: Why or Why Not
AFC
No shift.
Fix costs stay the same, regardless of quantity. Fixed cost is calculated as Fixed Cost/Quantity. Since fixed costs remain unchanged, AFC stays the same for each quantity.
MC
Shifts up.
Since the biodegradable cups are more expensive, the…
Styrofoam is non-biodegradable and is not easily recyclable. Many cities and at least one state have enacted laws that ban the use of polystyrene containers. These locales understand that banning these containers will force many businesses to turn to other more expensive forms of packaging and cups, but argue the ban is environmentally important.
Shane owns a firm with a conventional production function resulting in U-shaped ATC, AVC, and MC curves. Shane's business sells takeout food and drinks that are currently packaged in styrofoam containers and cups.
Graph the short-run AFC0, AVC0, ATC0, and MC0 curves for Shane's firm before the ban on using styrofoam containers.
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Chapter 20 Solutions
PRINCIPLES OF MICROECONOMICS (OER)
Ch. 20 - Explain how a tariff reduction causes an Increase...Ch. 20 - Explain how a subsidy on agricultural goods like...Ch. 20 - Explain how trade barriers save jobs in protected...Ch. 20 - Explain how trade barriers raise wages in...Ch. 20 - How does international trade affect working...Ch. 20 - Do the jobs for workers in low-income countries...Ch. 20 - How do trade barriers affect the average Income...Ch. 20 - How does the cost of saving jobs in protected...Ch. 20 - Explain how predatory pricing could be a...Ch. 20 - Why do low-income countries like Brazil, Egypt, or...
Ch. 20 - Explain the logic behind the race to the bottom...Ch. 20 - What are the conditions under which a country may...Ch. 20 - Why is the national security argument not...Ch. 20 - Assume a perfectly competitive market and the...Ch. 20 - What is the difference between a free trade...Ch. 20 - Why would countries promote protectionist laws,...Ch. 20 - What might account for the dramatic increase in...Ch. 20 - How does competition, whether domestic or foreign,...Ch. 20 - What are the gains from competition?Ch. 20 - Who does protectionism protect? From what does it...Ch. 20 - Name and define three policy tools for enacting...Ch. 20 - How does protectionism affect the price of the...Ch. 20 - Does international trade, taken as a whole,...Ch. 20 - Is international trade likely to have roughly the...Ch. 20 - How is international trade, taken as a whole,...Ch. 20 - Is international trade likely to have about the...Ch. 20 - What are main reasons for protecting infant...Ch. 20 - What is dumping? Why does prohibiting it often...Ch. 20 - What is the race to the bottom scenario?Ch. 20 - Do the rules of international trade require that...Ch. 20 - What is the national interest argument for...Ch. 20 - Name several of the international treaties where...Ch. 20 - What is the general trend of trade barriers over...Ch. 20 - If opening up to free trade would benefit a...Ch. 20 - Who gains and who loses from trade?Ch. 20 - Why is trade a good thing if some people lose?Ch. 20 - What are some ways that governments can help...Ch. 20 - Show graphically that for any tariff, there is an...Ch. 20 - From the Work It Out Effects of Trade Barriers,...Ch. 20 - If trade barriers hurt the average worker in an...Ch. 20 - Why do you think labor standards and working...Ch. 20 - How would direct subsidies to key industries be...Ch. 20 - How can governments identify good candidates for...Ch. 20 - Microeconomic theory argues that it is...Ch. 20 - How do you think Americans would feel if other...Ch. 20 - Is it legitimate to impose higher safety standards...Ch. 20 - Why might the unsafe consumer products argument be...Ch. 20 - Why might a tax on domestic consumption of...Ch. 20 - Why do you think that the GAIT rounds and, more...Ch. 20 - An economic union requires giving up some...Ch. 20 - What are some examples of innovative products that...Ch. 20 - In principle, the benefits of international trade...Ch. 20 - Economists sometimes say that protectionism is the...Ch. 20 - Trade has income distribution effects. For...Ch. 20 - Assume two countries, Thailand (T) and Japan (J),...Ch. 20 - You have just been put in charge of trade policy...Ch. 20 - The country of Pepperland exports steel to the...
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