Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 7IP
(a)
To determine
Import restriction and the impact on
(b)
To determine
Import policy that could have caused the same effect.
(c)
To determine
Import policy that allowed the import of 1.25 million ton sugar.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Much of the demand for U.S. agricultural output has come from other countries. In 1998, the total demand for wheat was Q = 3244 - 283P. Of this, total domestic demand was QD = 1700 - 107P, and domestic supply was QS =1944 + 207P. Suppose the export demand for wheat falls by 40%. a. U.S. farmers are concerned about this drop in export demand. What happens to the free-market price of wheat in the United States? Do farmers have much reason to worry? b. Now suppose the U.S. government wants to buy enough wheat to raise the price to $3.50 per bushel. With the drop in export demand, how much wheat would the government have to buy? How much would this cost the government?
Suppose the government imposes a quota on imports of foreign-made steel. Assume that the quota has an effect on the market for steal. The result will be that the domestic price of steel Answer 1 Question 8, the domestic production of steel Answer 2 Question 8, and imports of foreign-made steel Answer 3 Question 8
Why is there a price hike in sugar in the Philippines?
Chapter 5 Solutions
Microeconomics
Ch. 5.1 - Prob. 1QCh. 5.1 - Prob. 2QCh. 5.1 - Prob. 3QCh. 5.1 - Prob. 4QCh. 5.1 - Prob. 5QCh. 5.1 - Prob. 6QCh. 5.1 - Prob. 7QCh. 5.1 - Prob. 8QCh. 5.1 - Prob. 9QCh. 5.1 - Prob. 10Q
Ch. 5.A - Prob. 1QECh. 5.A - Prob. 2QECh. 5.A - Prob. 3QECh. 5.A - Prob. 4QECh. 5.A - Prob. 5QECh. 5.A - Prob. 6QECh. 5.A - Prob. 7QECh. 5.A - Prob. 8QECh. 5.A - Prob. 9QECh. 5 - Prob. 1QECh. 5 - Prob. 2QECh. 5 - Prob. 3QECh. 5 - Prob. 4QECh. 5 - Prob. 5QECh. 5 - Prob. 6QECh. 5 - Prob. 7QECh. 5 - Prob. 8QECh. 5 - Prob. 9QECh. 5 - Prob. 10QECh. 5 - Prob. 11QECh. 5 - Prob. 12QECh. 5 - Prob. 13QECh. 5 - Prob. 14QECh. 5 - Prob. 15QECh. 5 - Prob. 16QECh. 5 - Prob. 17QECh. 5 - Prob. 1QAPCh. 5 - Prob. 2QAPCh. 5 - Prob. 3QAPCh. 5 - Prob. 4QAPCh. 5 - Prob. 5QAPCh. 5 - Prob. 1IPCh. 5 - Prob. 2IPCh. 5 - Prob. 3IPCh. 5 - Prob. 4IPCh. 5 - Prob. 5IPCh. 5 - Prob. 6IPCh. 5 - Prob. 7IPCh. 5 - Prob. 8IPCh. 5 - Prob. 9IPCh. 5 - Prob. 10IPCh. 5 - Prob. 11IPCh. 5 - Prob. 12IPCh. 5 - Prob. 13IPCh. 5 - Prob. 14IP
Knowledge Booster
Similar questions
- Suppose that the world price of oil is $70 per barrel and that the United States can buy all the oil it wants at this price. Suppose also that the demand and supply schedules for oil in the United States are as follows: U.S. Quantity Demanded U.S. Quantity Supplied 26 14 24 16 22 18 20 20 18 22 Price ($ per Barrel) 55 60 65 70 75 Now suppose that the United States allows no oil imports. The equilibrium price in the United states is $ per barrel and the equilibrium quantity is million barrels. If the United States imposed a price ceiling of $55 per barrel on the oil market and prohibited imports, there would be an If the price ceiling is below $70, quantity supplied and quantity demanded differ. will determine how much oil is purchased. of million barrels of oil.arrow_forwardDiscuss the price elasticity of demand and the price elasticity of supply of goods that have low value but are limited in supply. Discuss why the reduction in world price of such commodities can be considered harmful to an economy that exports such commodities.arrow_forwardIf the size of a tariff raises the price of an imported item $20 per unit which in turn reduces the quantity of imports by 10%, what would be the effect on the price of an imported item, if the Government imposed a 10% import quota, which requires imports to fall by 10%arrow_forward
- 2. Suppose cheap mountain bikes are made in both the US and the Philippines. The supply and demand for each market are given by: US Qd = 9110 – P Qs = 100P – 2000 Philippines Qа 3D 100— 0.5P Q 3 Р- 20 Find the autarky equilibrium price and quantity sold in each country. b. Now suppose the two countries engage in international trade with each other. Find the combined supply and demand equations. Now find the trade price and quantity (world total quantity and imports/exports). Comment on the trade price and the relative size of the two markets. d. а. с. In general, which country will gain relatively more by engaging in international trade. Explain briefly.arrow_forwardAssume that the domestic supply curve for crude oil is S(P) = 5P and the domestic demand curve for crude oil is D(P)=500-20P. Further assume that domestic oil refiners face a perfectly elastic supply of oil imports at P = 16. a. Derive the domestic price, the quantity processed by domestic oil refiners, and the amount of imports at the competitive equilibrium. Show the results on a well-labeled graph. Now suppose that the domestic crude oil suppliers face a price ceiling of 8. Further suppose that for each two units of crude oil purchased, a domestic oil refiner gets one entitlement to domestic crude oil. Derive the marginal price of crude oil faced by domestic oil refiners. Add this to the graph in part (a). Derive the effect of regulation on the amount of crude oil processed by domestic oil refiners and the amount of imports. Show this on the graph from part (a). Derive the welfare effect of regulation on U.S. Shade in the welfare losses in the graph for part (a).arrow_forward1) World market price= 1.5. In absence of trade price of wheat equals $1. D=80-20P S=40+20P ABC Problem 2 In the example of problem 1, suppose Foreign offers exporters a subsidy of 0.25 per unit. a. Determine and graph the effects of the export subsidy on the price of wheat and the quantity of wheat supplied and demanded in Foreign. b. Determine using a graph the effect of the export subsidy on the welfare of each of the following groups: (1) Foreign wheat producers; (2) Foreign consumers; (3) the Foreign government.arrow_forward
- Suppose that the world price of oil is $70 per barrel and that the United States can buy all the oil it wants at this price. Suppose also that the demand and supply schedules for oil in the United Sta follows: Price ($ per Barrel) 55 60 65 70 75 U.S. Quantity Demanded 26 24 22 20 18 U.S. Quantity Supplied 14 16 18 20 22 Now suppose that the United States allows no oil imports. The equilibrium price in the United states is $ 70 per barrel and the equilibrium quantity is 20 million barrels. If the United States imposed a price ceiling of $65 per barrel on the oil market and prohibited imports, there would be an of million barrels of oil. excess supply excess demandarrow_forwardSuppose the market for steel is expressed as follows: Domestic demand: p = 40 - 0.2q, or q = 200 - 5p Domestic supply: p = 0.2q, or q = 5p Domestic supply (foreign): p = 0.1q, or q = 10p a) What is the equilibrium price and quantity if there is free trade, with no restriction on imports? b) What is the equilibrium price and quantity if the government imposes a binding import quota of 20 units? Depict parts a and b on a single graph. c) How are US steel firms affected by the quota? US automakers? Explain briefly.arrow_forwardThe graph to the right shows the supply and demand for Japanese-made automobiles in the United States. Assume that Japanese-made and U.S.-made automobiles are of the same quality and are considered to be perfect substitutes. Suppose that the U.S. government imposes a tariff on Japanese-made automobiles. 1.) Using the line drawing tool, show the effect on the market for Japanese-made automobiles. Properly label your line. 2.) Using the point drawing tool, identify the new equilibrium price and quantity. Label it 'E₂'. Carefully follow the instructions above, and only draw the required objects. As a result of the tariff, the price of Japanese-made cars rises and the quantity falls. In the market for American-made cars, there will be and thus the price of American-made cars will equilibrium quantity will and the Price per Automobile ($) S Japanese-made Automobiles (thousands)arrow_forward
- Question-05: A vegetable fiber is traded in a competitive world market, and the world price is $9 per pound. Unlimited quantities are available for import into the United States at this price. The U.S. domestic supply and demand for various price levels are shown as follows: U.S. Supply (Million LBS) U.S. Demand Price (Million LBS) 3 34 6 4 28 9. 22 12 8 16 15 10 10 18 12 4 What is the equation for demand? What is the equation for supply? а. b. At a price of $9, what is the price elasticity of demand? What is it at a price of $12? What is the price elasticity of supply at $9? At $12? c. In a free market, what will be the U.S. price and level of fiber imports? d.arrow_forwardMuch of the demand for U.S. agricultural output has come from other countries. In 1998, the total demand for wheat was Q = 3,244 - 283P. Of this, total domestic demand was Qn = 1700 - 107P, and domestic supply was Qs = 1,944 + 207P Suppose the export demand for wheat falls by 50 percent. U.S. farmers are concerned about this drop in export demand. What happens to the free-market price of wheat in the United States? The free-market price of wheat in the United States after the drop in export demand is $1.31. (Enter your response rounded to two decimal places.) Do famers have much reason to worry? O A. Farmers have reason to worry because the equilibrium quantity decreases from 3,492.55 million bushels to 2,215.17 million bushels. O B. Farmers have reason to worry because the market price for wheat decreases from $3.65 per bushel to $1.31 per bushel. OC. Farmers have no reason to worry because the equilibrium quantity decreases from 2,592.55 million bushels to 2,215.17 million bushels. O…arrow_forwardConsider a small (home) country with the following inverse demand of: P = 200 − 3QD and inverse supplyof: P = 20 + QS for a barrel of oil. The world demand is perfectly horizontal with a price of: P^X = 100.Solve the following for the home country:A) Calculate the equilibrium price and quantityB) Calculate the consumer surplus, producer surplus (note the shape), and total surplusNow, suppose the home country opens up to free trade.C) Calculate the quantity supplied, quantity demanded, export quantity, and priceD) Calculate the consumer surplus, producer surplus, and total surplusNow, suppose the home country is open to free trade and provides an export subsidy of $15 per barrel of oil.E) Calculate the equilibrium price and quantityF) Calculate the consumer surplus, producer surplus, tax revenue, and total surplusG) Explain how the three outcomes: no trade, free trade, and trade with an export tariff, affect the homecountry (consumers, producers, and overall welfare)H) What changes if…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education