EBK ECONOMICS
20th Edition
ISBN: 9780077660710
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 38, Problem 10RQ
To determine
A change in the domestic price of wheat due to closing the economy.
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Price (dollars per shirt)
44
40
36
32
28
24
20
16
12
O
8
O 32 million
The figure shows the market for shirts in the United States, where D is the domestic demand curve
and S is the domestic supply curve. The world price is $20 per shirt. The United States imposes a
tariff on imported shirts, $4 per shirt.
24 million
S
In the figure above, with the tariff the United States imports
8 million
D
O 16 million
16 24 32 40 48 56 64
Quantity (millions of shirts per year)
million shirts per year.
20. Assume that two countries (Home and Foreign) each produce two goods (wheat and rice) under
constant cost production. Home produces 3 tons of rice or 1 ton of wheat with a day of labour. Foreign
produces 2 tons of rice or 4 tons of wheat each day of labour. Without trade (in autarky), Home's daily
production is 60 tons of rice and 20 tons of wheat. At which international price will Home's gains from
trade be largest?
A. 3 tons of rice per ton of wheat
B. 2.5 tons of rice per ton of wheat
C. 2 tons of rice per ton of wheat
D. 1.5 ton of rice per ton of wheat
E. 1 ton of rice per ton of wheat
If the world price of shoes is $50/pair, how many pairs of shoes will be produced in the U.S.? How many pairs will be consumed? What is the level (quantity) of exports or imports?
Suppose the government places a $25/pair tariff on shoes. What are the new levels of U.S. production, consumption, imports or exports, and price paid for shoes by Americans?
Chapter 38 Solutions
EBK ECONOMICS
Ch. 38.2 - Prob. 1QQCh. 38.2 - Prob. 2QQCh. 38.2 - Prob. 3QQCh. 38.2 - Prob. 4QQCh. 38 - Prob. 1DQCh. 38 - Prob. 2DQCh. 38 - Prob. 3DQCh. 38 - Prob. 4DQCh. 38 - Prob. 5DQCh. 38 - Prob. 6DQ
Ch. 38 - Prob. 7DQCh. 38 - Prob. 8DQCh. 38 - Prob. 9DQCh. 38 - Prob. 10DQCh. 38 - Prob. 11DQCh. 38 - Prob. 12DQCh. 38 - Prob. 13DQCh. 38 - Prob. 14DQCh. 38 - Prob. 1RQCh. 38 - Prob. 2RQCh. 38 - Prob. 3RQCh. 38 - Prob. 4RQCh. 38 - Prob. 5RQCh. 38 - Prob. 6RQCh. 38 - Prob. 7RQCh. 38 - Prob. 8RQCh. 38 - Prob. 9RQCh. 38 - Prob. 10RQCh. 38 - Prob. 11RQCh. 38 - Prob. 12RQCh. 38 - Prob. 13RQCh. 38 - Prob. 1PCh. 38 - Prob. 2PCh. 38 - Prob. 3PCh. 38 - Prob. 4P
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