Economics: Private and Public Choice
16th Edition
ISBN: 9781337642224
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel
Publisher: Cengage Learning US
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Chapter 6, Problem 15CQ
To determine
Explain the sugar import quota system in the country U.
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What would be the effects of imposing a quota on imported cars from Japan? Explain the effects for the American consumers and producers.
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Why do consumers in the United States pay more than double the world price for sugar?
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Economics: Private and Public Choice
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- H3.arrow_forwardWhich of the choices describes how the effects of import tariffs and import quotas are different? The domestic cost of an import tariff is larger than the domestic cost of a comparable import quota. Import tariffs create deadweight loss, whereas import quotas do not create deadweight loss. Quotas do not affect the equilibrium price, whereas tariffs do not affect the equilibrium quantity. Some foreign producers receive some of the benefits generated by an import quota.arrow_forwardAnalyze the Economic Effects of Tariffs and Quotas. Give examples.arrow_forward
- The Nigerian president decreases the amount of imported tea allowed into the country by 100 million pounds per year. Which trade is this?arrow_forwardChina placed tariffs on the importation of US soybeans. Assume that the domestic market for soybeans in China is described by the following equations: Demand: P = 11.5 – Q Supply: P = 5.5 + Q Price is in 10 Yuan (¥) per bushel of soybeans and the units for Quantity are 100 million bushels per year. This is to make graphing simpler. This does NOT mean that the price is 10 and quantity is 100. Rather it means that if the price was 40¥ and the quantity was 7,500,000,000 bushels, this would plot as 4 and 7.5 respectively. The world price for soybeans is ¥65/bushel (this would graph as a horizontal line at 6.5). Graph the soybean market in China showing equilibrium both with no barriers to trade and with a ¥15/bushel tariff. Be sure to fully and clearly label the graph including: Domestic Demand curve (D), Domestic Supply curve (S), the World Price (WP), and the Price with tariffs (PT), along with the quantities imported both with and without the tariff. Based on your graph, what…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_forward
- Why did the U.S. government in 1982 provide import quotas as an aid to domestic sugar producers?arrow_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_forwardExporting countries Which of the following will be true, everything else remaining constant, for a country that exports some good? a)The greater the price elasticity of supply for the good in the exporting country, the greater the volume of exports. b) The more that consumers in the exporting country respond to a change in price, the greater will be the gains from trade. b) The smaller the price elasticity of demand and supply in the exporting country, the greater the gains from trade. c) Some domestic suppliers will lose surplus while others will gain surplus. Choose the statements that match the question and briefly explain your reasoning to understand the question better. Thankyou.arrow_forward
- A US quota limiting the import of cars from Japan to 1000 a year will have the following effect Select the correct answer below: reduce the price of Japanese cars on the domestic market cause the loss of jobs in the car manufacturing industry in the US increase the sale of US cars in the domestic market O reduce the profits of US car manufacturersarrow_forwardDirect investment should only be used when there is a low chance of success and the market has weak potential the market is stable and flat there is a low chance of success and the market has strong potential there is a high chance of success and the market has strong potential there is a high chance of success and the market has weak potentialarrow_forwardFor a large country import tariffs will yield a price increase for domestic consumer that is A higher than the tariff itself B equal to the tariff itself C smaller than the tariff itselfarrow_forward
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