Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 3IAPA
To determine
The price and quantity of wheat when there is free international trade in wheat is to be determined.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Trying to construct a graph that shows
U.S. Demand curve for sugar.
U.S. Supply curve for sugar.
Show world price and U.S. price (show dollar values).
Show quantity supplied by U.S. firms and U.S. sugar consumption on graph (show values). Quantity is in pounds. These values are on the attached files.
Figure how many pounds of sugar are imported. This will be a value. Show it on the graph.
Shade the area(s) of dead-weight loss on the graph (no value needed).
Mark the area which is the revenue for foreign sugar producers—figure the dollar value and note it on the graph.
Sugar consumption in the U.S. 2009-2019
Pounds(Billions)
2009
21.82
2010
22.48
2011
22.26
2012
22.92
2013
23.58
2014
23.80
2015
23.80
2016
24.20
2017
24.09
2018
24.20
2019
24.25
Sugar production in the U.S. 2009-2019
Pounds(Billions)
2009
15.87
2010
15.65
2011
16.97
2012
17.85
2013
16.97
2014
17.30
2015
17.98…
Consider a small country that exports steel. Suppose the following graph depicts the domestic demand and supply for steel in this country. One of the
two price lines represents the world price of steel.
Use the following graph to help you answer the questions below. You will not be graded on any changes made to this graph.
Demand
Supply
100
90
Triangle
80
P2
70
Polygon
50
40
P1
20
10
400
500
600
700
800
900 1000
100
200
300
Quantity of Steel (Tons)
Price of Steel (Dollars per ton)
Consider a small country that exports steel. Suppose the following graph depicts the domestic demand and supply for steel in this country. One of the
two price lines represents the world price of steel.
Use the following graph to help you answer the questions below. You will not be graded on any changes made to this graph.
Price of Steel (Dollars per ton)
100
88
2882
8
20
10
Demand
Supply
100 200 300 400 500 600 700 800 900 1000
Quantity of Steel (Tons)
Because this country exports steel, the world price is represented by
With this export subsidy, the price paid by domestic consumers is $
The quantity of steel consumed by domestic consumers
, and the quantity of steel exported
O True
O False
Triangle
8
Suppose that a "pro-trade" government decides to subsidize the export of steel by paying $10 for each ton sold abroad.
Under the export subsidy, consumer surplus is $
S
As a result, total surplus
Polygon
?
True or False: With the export subsidy, domestic producers will sell steel to…
Chapter 9 Solutions
Foundations of Economics (8th Edition)
Ch. 9 - Prob. 1SPPACh. 9 - Prob. 2SPPACh. 9 - Prob. 3SPPACh. 9 - Prob. 4SPPACh. 9 - Prob. 5SPPACh. 9 - Prob. 6SPPACh. 9 - Prob. 7SPPACh. 9 - Prob. 8SPPACh. 9 - Prob. 9SPPACh. 9 - Prob. 10SPPA
Ch. 9 - Prob. 11SPPACh. 9 - Prob. 1IAPACh. 9 - Prob. 2IAPACh. 9 - Prob. 3IAPACh. 9 - Prob. 4IAPACh. 9 - Prob. 5IAPACh. 9 - Prob. 6IAPACh. 9 - Prob. 7IAPACh. 9 - Prob. 8IAPACh. 9 - Prob. 9IAPACh. 9 - Prob. 1MCQCh. 9 - Prob. 2MCQCh. 9 - Prob. 3MCQCh. 9 - Prob. 4MCQCh. 9 - Prob. 5MCQCh. 9 - Prob. 6MCQCh. 9 - Prob. 7MCQ
Knowledge Booster
Similar questions
- Suppose the Italian government imposes a tariff on imported lumber products. The effect this tariff has on the Italian lumber market is to ______ domestic prices, ______ consumer surplus, and ______ producer surplus.arrow_forwardQuestion 7 Consider again this same graph: Price 40 8 7 6 5 4 3 2 0 Tariff Domestic supply Domestic demand 10 20 30 40 50 60 70 80 World price Quantity Tell me the amount of gains from trade, carefully following all numeric instructions.arrow_forwardEconomics A trade expert compares the modern tariffs to the Depression-era Smoot-Hawley tariffs. He says “The economic impact is going to take years to play out." What was the effect of the Smoot- Hawley tariffs on U.S. trade? a) Both imports and exports rose by nearly about the same amount, the trade balance remained about the same, and the total volume of trade increased. b) Both imports and exports fell by nearly about the same amount, the trade balance remained about the same, and the total volume of trade decreased. c) Imports decreased, and the trade balance increased. The total volume of trade was nearly unchanged. d) Imports decreased, and the trade balance was nearly unchanged. The total volume of trade decreased.arrow_forward
- Steel Industry Consider a small country that exports steel. Suppose the following graph depicts the domestic demand and supply for steel in this country. One of the two price lines represents the world price of steel. Use the following graph to help you answer the questions below. You will not be graded on any changes made to this graph. 1. Because this country exports steel, the world price is represented by P1 or P2. Suppose that a “pro-trade” government decides to subsidize the export of steel by paying $10 for each ton sold abroad. 2. With this export subsidy, the price paid by domestic consumers is $???? per ton, and the price received by domestic producers is $???? per ton. 3. The quantity of steel consumed by domestic consumers INCREASES or REMAINS UNCHANGED or DECREASES, the quantity of steel produced by domestic producers INCREASES or REMAINS UNCHANGED or DECREASES, and the quantity of steel exported INCREASES or REMAINS UNCHANGED or DECREASES. 4. TRUE or FALSE:…arrow_forwardPrice 10 Price at which good sells = 7.25 Price at which good sells = 6 Marginal cost of producing amount traded = 4 Marginal cost of producing amount traded = 2.75 Price Price gap=t gap=t 4,000 6,000 Quantity Figure 18.3 The market for cars: Price gaps reflect trade costs. The exporter's supply curve The consumer's demand curve 15,000arrow_forward23. What happens to the relative price of a good as a result of trade if there is an increasing return to scale in the industry producing the good. Is it still converging to a price between domestic and foreign price of the good? Draw a graph to answer.arrow_forward
- Bangladesh eyes investment gain as Japanese firms exit China Japan incentivizing its companies to shift manufacturing facilities out of China and adding Bangladesh to a list of preferred destinations for relocating the factories may give the South Asian nation’s economy a boost.“As the pandemic started in China, Japanese companies needed to diversify” their supply chains further, Naoki Ito, the Japanese ambassador to Bangladesh, said in an interview. “This will provide an opportunity for Bangladesh.”The island nation’s nudge to relocate companies comes at a time when a Special Economic Zone is in the making in Bangladesh to lure Japanese firms’ production facilities. The industrial zone sprawling on 1,000 acres in the Araihazar subdistrict, 32 kilometers away (about 20 miles) from the nation’s capital Dhaka, is expected to bring in $20 billion in Japanese investments, according to the Bangladesh Economic Zones Authority.Japanese manufacturers have already been seeking lower labor costs…arrow_forwardSuppose the equation for the demand curve in a market is P=100-1.5QD, where Qp is the quantity demanded and P is the price. Also, suppose the equation for the supply curve in the same market is P=0.5Qs , where Qs is the quantity supplied. Suppose there is an external cost of $12 associated with the production of each unit of the good. What is the socially optimal quantity, and how much is the social cost at this quantity? P=$22; Q=44 P=$31; Q=46 P=$34; Q=44 P=$25; Q=50 O O O Oarrow_forwardThe graph above is the U.S. market for some imported good. Supply is a flat curve. The U.S. can import the Chinese good for $40 and the Mexican good for $48. Assume the U.S. imposes $10 tariffs on each unit of the imported good. What will be the quantity imported? From which country? How your answer will change if the U.S. keep the $10 tariffs but join a trade bloc with Mexico? Will the country’s wellbeing increase or decrease? By how much (hint find the change in consumer surplus and the change in government revenue)? Explain your answers.arrow_forward
- Question 1 Table 1 illustrates the supply and demand schedules for cheeses in Sweden and Norway. On graph paper, draw the supply and demand schedules for each country. a. In the absence of trade, what are the equilibrium price and quantity of cheeses produced in Sweden and Norway? Which country has the comparative advantage in cheeses? b. Assume there are no transportation costs. With trade, what price brings about balance in exports and imports? How many cheeses are traded at this price? How many cheeses are produced and consumed in each country with trade? c. Suppose the cost of transporting each cheese from Sweden to Norway is $5. With trade, what is the impact of the transportation cost on the price of the traded product in each trading nation? The extent of specialization? The volume of trade? Table 1 Price 5 10 15 20 25 30 35 40 45 Sweden Quantity Supplied Quantity Demanded Price 200 400 600 800 1,000 1,200 1,400 1,600 1,800 1,200 1,000 800 600 400 200 5 10 15 20 25 30 35 40 45…arrow_forwardimport tariffs on steel decrease. a developer in chicago starts work on a new high rise. draw the change in steel market.arrow_forwardWhen China's clothing industry expands, the increase in world supply lowers the world price of clothing. Consider the effects this has on both an importer and an exporter of clothing.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub CoMicroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
- Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage LearningEconomics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning