Essentials of Economics (MindTap Course List)
7th Edition
ISBN: 9781285165950
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 9, Problem 1QCMC
To determine
The advantage to the nation.
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a. If trade is avoided, Spain consumes _____ wrenches at a price of _____ per wrench.
b. With free trade, for a world price of $4 per wrench, Spain is producing _____wrenches.
c. With free trade, for a world price of $4 per wrench, Spain is consuming _______ wrenches.
d. With free trade, for a world price of $4 per wrench, Spain is importing _________wrenches.
e. If the world price is $4 per wrench, and the government of Spain imposes a tariff of $2, Spain produces ____________ and imports __________wrenches.
f. If the world price is $4 per wrench, and the government of Spain imposes a tariff of $2, how much tariff revenue will the Spain’s government collect? _____
In reference to tariffs, What is the reason that U.S. imposes tariffs? why the U.S. imposes tariffs on imports?
Hello please provide homeowrk help with the following usung the image provided. Thank you.1. What is the opportunity cost of one more unit of Lumber in Country B and who has the comparative advantage in Wheat production?
2. What country has the comparative advantage in Lumber production?
3. What is the acceptable term of trade for which both countries will gain from trade?
Chapter 9 Solutions
Essentials of Economics (MindTap Course List)
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- You just overheard your friend say the following: Poor countries like Malawi have no absolute advantages. They have poor soil, low investments in formal education and hence low-skill workers, no capital, and no natural resources to speak of. Because they have no advantage, they cannot benefit from trade. How would you respond?arrow_forwardIf higher tariffs, such as those enacted by the Smoot-Hawley trade bill, reduce the imports of the United States, which of the following will be most likely to occur? a. U.S. employment will increase. b. The unemployment rate of the United States will decline. c. U.S. exports will increase because foreigners will want to buy more from U.S. producers. d. U.S. exports will decline because foreigners will be earning fewer of the dollars needed to purchase goods and services from Americans.arrow_forwardSuppose the free trade market price of a car is $10,000. It contains $5000 worth of steel. The importing country imposes 25% tariff on car imports. a. Calculate the effective rate of protection if there is no duty on steel imports. b. Calculate the effective rate of protection if the importing country imposes a 20% tariff on steel imports. c. Suppose it also takes $2000 worth of copper (besides $5000 worth of steel) to produce a car. Calculate the effective rate of protection if there is no import tariff on the imports of either steel or copper. d. Suppose there is an import duty of 20% and 15% on imports of steel and copper, respectively. Calculate the effective tariff rate.arrow_forward
- I attached the graph to this question. 1. If trade is avoided, Spain consumes _____ wrenches at a price of _____ per wrench. 2. With free trade, for a world price of $4 per wrench, Spain is producing _____wrenches. 3. With free trade, for a world price of $4 per wrench, Spain is consuming _______ wrenches. 4. With free trade, for a world price of $4 per wrench, Spain is importing _________wrenches. 5. If the world price is $4 per wrench, and the government of Spain imposes a tariff of $2, Spain produces ____________ and imports __________wrenches. 6. If the world price is $4 per wrench, and the government of Spain imposes a tariff of $2, how much tariff revenue will the Spain’s government collect?arrow_forwardSuppose each worker in Home can produce 12 wheat or 4 TVs. Assume that Home has 10 workers. Suppose each worker in Foreign can produce 8 wheat or 2 TVs. Assume that Foreign has 20 workers. a. What is the no-trade relative price of TVs in Home and Foreign respectively?b. Which country has an absolute advantage in the production of wheat? Whichcountry has a comparative advantage in the production of wheat?c. Use two graphs (one for Home and one for Foreign) to display productionpossibilities along with indifference curves and label no-trade equilibria and a trade equilibrium constructed by you. (Assume that positive quantities of both goods are consumed in both countries in all equilibria). Pick your own numbers for the relative price in the trade equilibrium and for quantities consumed in the trade and no-trade equilibria for both countries.d. What is the real wage in units of wheat in Home in the no-trade and in your proposed trade equilibrium?e. Calculate the gains from trade for Home…arrow_forwardWhich of the following is NOT a reason why countries impose tariffs on imports? A. Protect domestic industries B. Retaliation C. National security D. None of the abovearrow_forward
- a. Suppose that the international relative price of cloth goes up. How will this affect the trade line and optimal level of consumption in the cloth exporting country? How would this impact the production in the exporting country? Show on the graph and explain (don’t worry about numbers). b. Is this change in the international relative price an improvement or deterioration in the terms of trade of the rest of the world? According to your graph, does the rest of the world gain or lose well-being? Explain!arrow_forwardEach country should specialize in producing that good for which it a. has a comparative advantage b. has an absolute advantage c. it has a higher opportunity costarrow_forwardThe graph to the right shows the supply and demand for beef in the United States, under the assumption that the United States can import as much as it wants at the world price of beef without causing the world price of beef to increase. a. How much beef does the United States import at the world price(WP)? 500 million pounds of beef (enter a whole number). b. Now suppose that the United States imposes a tariff on beef of $0.50 a pound. How much beef is now imported? million pounds of beef (enter a whole number). Price ($ per lb.) $2.50 $2.00 700 900 11001200 Q (millions of lbs.) Sus WP + tariff WP Dusarrow_forward
- 3. Two areas, Europe and America, can produce only goods A and B, under constant costs as indicated below. What will be the result of free trade between the two areas? In Europe In America 1 unit of good A 2 hours of labor 3 hours of labor 1 unit of good B 4 hours of labor 5 hours of labor a. Europe will export A and B to America. b. Europe will import A and export B. c. Europe will import B and export A. d. Europe will import A and B from America. e. No trade will take place.arrow_forward4. With free trade, for a world price of $4 per wrench, Spain is importing ________ wrenches. 5. If the world price is $4 per wrench, and the government of Spain imposes a tariff of $2, Spain produces ______________ and imports ______________ wrenches. 6. If the world price is $4 per wrench, and the government of Spain imposes a tariff of $2, how much tariff revenue will the Spain's government collect? __________arrow_forwardPlease helpwith how you calculate the mangosarrow_forward
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