Trade barrier and theory of trade.

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Answer 1

Question

Chapter 9, Problem 1FT

To determine

Trade barrier and theory of trade.

Expert Solution & Answer

Explanation of Solution

By removing the trade barriers, Japanese consumers would be better off, whereas the Japanese rice farmers would be worse off. The net gain would be positive according to the theory of trade; Japanese consumers would be better off than Japanese producers (who would be worse off). By the theory of politics, Japanese rice farmers would be lobbying against the reduction in trade barriers than consumers who would be favoring the reduction in barriers. The gains received per consumer are comparatively lower than the losses to producers. Thus, the producers will have a greater incentive to lobby against reductions in trade barriers.

Economics Concept Introduction

Concept introduction:

Trade barrier: Trade barriers refer to the government-induced restrictions imposed usually on international trade.

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Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.

Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…

Answer 2

Question

Chapter 9, Problem 1FT

To determine

Trade barrier and theory of trade.

Expert Solution & Answer

Explanation of Solution

By removing the trade barriers, Japanese consumers would be better off, whereas the Japanese rice farmers would be worse off. The net gain would be positive according to the theory of trade; Japanese consumers would be better off than Japanese producers (who would be worse off). By the theory of politics, Japanese rice farmers would be lobbying against the reduction in trade barriers than consumers who would be favoring the reduction in barriers. The gains received per consumer are comparatively lower than the losses to producers. Thus, the producers will have a greater incentive to lobby against reductions in trade barriers.

Economics Concept Introduction

Concept introduction:

Trade barrier: Trade barriers refer to the government-induced restrictions imposed usually on international trade.

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Answer 3

Question

Chapter 9, Problem 1FT

To determine

Trade barrier and theory of trade.

Expert Solution & Answer

Explanation of Solution

By removing the trade barriers, Japanese consumers would be better off, whereas the Japanese rice farmers would be worse off. The net gain would be positive according to the theory of trade; Japanese consumers would be better off than Japanese producers (who would be worse off). By the theory of politics, Japanese rice farmers would be lobbying against the reduction in trade barriers than consumers who would be favoring the reduction in barriers. The gains received per consumer are comparatively lower than the losses to producers. Thus, the producers will have a greater incentive to lobby against reductions in trade barriers.

Economics Concept Introduction

Concept introduction:

Trade barrier: Trade barriers refer to the government-induced restrictions imposed usually on international trade.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 9, Problem 1FT

To determine

Trade barrier and theory of trade.

Expert Solution & Answer

Explanation of Solution

By removing the trade barriers, Japanese consumers would be better off, whereas the Japanese rice farmers would be worse off. The net gain would be positive according to the theory of trade; Japanese consumers would be better off than Japanese producers (who would be worse off). By the theory of politics, Japanese rice farmers would be lobbying against the reduction in trade barriers than consumers who would be favoring the reduction in barriers. The gains received per consumer are comparatively lower than the losses to producers. Thus, the producers will have a greater incentive to lobby against reductions in trade barriers.

Economics Concept Introduction

Concept introduction:

Trade barrier: Trade barriers refer to the government-induced restrictions imposed usually on international trade.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 9, Problem 1FT

To determine

Trade barrier and theory of trade.

Expert Solution & Answer

Explanation of Solution

By removing the trade barriers, Japanese consumers would be better off, whereas the Japanese rice farmers would be worse off. The net gain would be positive according to the theory of trade; Japanese consumers would be better off than Japanese producers (who would be worse off). By the theory of politics, Japanese rice farmers would be lobbying against the reduction in trade barriers than consumers who would be favoring the reduction in barriers. The gains received per consumer are comparatively lower than the losses to producers. Thus, the producers will have a greater incentive to lobby against reductions in trade barriers.

Economics Concept Introduction

Concept introduction:

Trade barrier: Trade barriers refer to the government-induced restrictions imposed usually on international trade.

Answer 6

Chapter 9, Problem 1FT

To determine

Trade barrier and theory of trade.

Expert Solution & Answer

Explanation of Solution

By removing the trade barriers, Japanese consumers would be better off, whereas the Japanese rice farmers would be worse off. The net gain would be positive according to the theory of trade; Japanese consumers would be better off than Japanese producers (who would be worse off). By the theory of politics, Japanese rice farmers would be lobbying against the reduction in trade barriers than consumers who would be favoring the reduction in barriers. The gains received per consumer are comparatively lower than the losses to producers. Thus, the producers will have a greater incentive to lobby against reductions in trade barriers.

Economics Concept Introduction

Concept introduction:

Trade barrier: Trade barriers refer to the government-induced restrictions imposed usually on international trade.

Answer 7

Chapter 9, Problem 1FT

To determine

Trade barrier and theory of trade.

Answer 8

Expert Solution & Answer

Explanation of Solution

By removing the trade barriers, Japanese consumers would be better off, whereas the Japanese rice farmers would be worse off. The net gain would be positive according to the theory of trade; Japanese consumers would be better off than Japanese producers (who would be worse off). By the theory of politics, Japanese rice farmers would be lobbying against the reduction in trade barriers than consumers who would be favoring the reduction in barriers. The gains received per consumer are comparatively lower than the losses to producers. Thus, the producers will have a greater incentive to lobby against reductions in trade barriers.