Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 9, Problem 3MCQ
To determine
The correct option for the statement : 'With free trade between United States and Canada, The united States exports tomatoes and Canada exports maple syrup. U.S consumers ________ .'
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Economists argue for free trade in import markets because
importing goods decreases total surplus.
no one is made worse off by importing goods.
all consumers and producers benefit from importing goods.
O the gains to the U.S. producers outweigh the losses to the U.S. consumers
the gains to the U.S. consumers outweigh the losses to the U.S. producers
a. In the absence of trade, what is the equilibrium price and equilibrium quantity?
b. The government opens the wheat market to free trade and U.S enters the Turkish market,
pricing wheat at $40 per ton. What will happen to the domestic price of wheat? What will be
the new domestic quantity supplied and domestic quantity demanded? How much wheat will
be imported from U.S?
c. The government imposes a $10 per ton tariff on all imported wheat. What will happen to
the domestic price of wheat? What will be the new domestic quantity supplied and domestic
quantity demanded? How much wheat will now be imported from U.S?
d. How much revenue will the Turkish government receive from the $10 per ton tariff?
Assume Australia is an importer of sofas and there are no trade restrictions. Australian consumers buy 1 000 000 sofas per year, of which 450 000 are produced domestically and 550 000 are imported.a Suppose that a technological advance among Swedish sofa manufacturers causes the world price of sofas to fall by $200. Draw a graph to show how this change affects the welfare of Australian consumers and Australian producers, and how it affects total surplus in Australia.b After the fall in price, Australian consumers buy 1 150 000 sofas, of which 300 000 are produced domestically and 850 000 are imported. Calculate the change in consumer surplus, producer surplus and total surplus from the price reduction.c If the government responded by putting a $200 tariff on imported sofas, what would this do? Calculate the revenue that would be raised and the deadweight loss. Would it be a good policy from the standpoint of Australian welfare? Who might support the policy?d Suppose that the fall in…
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
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