EBK ESSENTIALS OF ECONOMICS
7th Edition
ISBN: 8220102452107
Author: Mankiw
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 3QCMC
To determine
The impact of international trade converting a country to importer.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Economics
When a new tariff is placed on imported furniture,
which of the following is expected to happen in
the domestic market for furniture, all else being
equal?
a.Consumer surplus and producer surplus both
increase.
b.Consumer surplus decreases and producer
surplus increases.
c.Consumer surplus and producer surplus both
decrease.
d.Consumer surplus increases and producer
surplus decreases.
A country moves from a situation of no trade to a situation where it imports a good. Which of the following does not occur in the market for this good in the importing country?
A. Deadweight loss decreases.
B. Total surplus increases.
C. Consumer surplus increases.
D. Producer surplus decreases.
E. Workers in the domestic industry lose.
During the first 6 months of 2008, the United States imported from Africa, Asia, and Latin America more than 1.6 billion pounds of coffee and did not export any coffee. How is the gain from imports distributed between consumers and domestic producers?
A. U.S. producer surplus shrinks.
B. U.S. consumer surplus increases.
C. Total U.S. surplus increases.
D. All the above answers are correct.
Chapter 9 Solutions
EBK ESSENTIALS OF ECONOMICS
Knowledge Booster
Similar questions
- Assume the United States is an importer of televisions and there are no trade restrictions. US consumers buy 1 million televisions per year, of which 400,000 are produced domestically and 600,000 are imported,a. Suppose that a technological advance among Japanese television manufacturers causes the world price of televisions to fall by $100. Draw a graph to show how this change affects the welfare of U.S. consumers and U.S. producers and how it affects total surplus in the United States.b. After the fall in price, consumers buy 1.2 million televisions, of which 200,000 are produced domestically and 1 million 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 $100 tariff on imported televisions, 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 U.S. welfare? Who might support the policy?d.…arrow_forwardThe United States has historically imposed import tariffs on goods that include tobacco, canned tuna, steel, and aluminum. Suppose the market for tobacco is illustrated by the accompanying graph.arrow_forwardcan you help me place where I need to chart consumer surplus and producer surplus on each attachment. Finally, can you help answer the question from the two attachments: overall, exporting countries _are harmed by, or benefit from, or are not affected by the fall in the world price of clothing, and importing countries _are harmed by, or benefit from, or are not affected by___________ the price change.arrow_forward
- Suppose the European Union imposes trade sanctions (export quotas) on food sold to Russia. Imagine other nations do not increase their food exports to Russia. Which of the following does not happen? A. food prices increase in Russia B. consumer surplus declines in Russia C. food prices increase in the European Union D. export revenues decline in the European Unionarrow_forwardAssume 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…arrow_forwardAssume 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…arrow_forward
- The figure above shows the domestic market for calculators in Haiti. What is the change in total surplus in Haiti because of trade? a. $865 b. $625 c. $1500 d. $2800 Price of Calculators $27 12 7 Domestic Supply World Price Domestic 2 Demand 0 150 300 400 Quantity of Calculatorsarrow_forwardThe U.S. is an importer of ethanol, and let’s assume they are a price-taker in the world market. Suppose that a technological advance in ethanol production in Brazil, the world’s largest exporter, drives down the world price of ethanol by $5. Draw a graph and explain how this change in world price affects consumer surplus, producer surplus, and total surplus in the U.S. market. Now suppose the U.S. government institutes an import tariff of $5 in response to the fall in the world price. On your graph label the revenue raised by the tariff and the deadweight loss created (if it exists). Who is likely to support this policy? Suppose that the fall in price is attributable not to a technological advance but to a subsidy from the Brazilian government to Brazilian ethanol producers. How would this affect your analysis?arrow_forward1. Assume that Canada is an importer of televisions and that there are no trade restrictions. Canadian consumers buy 1 million televisions per year, of which 400 000 are produced domestically and 600 000 are imported. Suppose that a technological advance among Japanese television manufacturers causes the world price of televisions to fall by $100. Draw a graph to show how this change affects the welfare of Canadian consumers and Canadian producers and how it affects total surplus in Canada. b. After the fall in price, consumers buy 1.2 million televisions, of which 200 000 are produced domestically and 1 million 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 $100 tariff on imported televisions, 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 Canadian welfare? Who might support…arrow_forward
- 3. A local economy's market demand for drones is given by Q® = 24 - 4P while supply is given by Q5 = 8P. Assume that domestic and world economic conditions were such thạt the local economy started exporting drones. What is the effect of drone exports on local economy's produćer surplus, consumer surplus and total surplus? Suppose instead that domestic and world economic conditions change such that it makes more sense for the local economy to start importing drones. What is the effect of drone imports on the local coconomy's producer surplus, consumer surplus and total surplus?arrow_forwardEconomics 4. Depict on graph and briefly explain economic consequences of export subsidy: • for domestic exporters; • for domestic consumers; • for government budget; • for national economic welfare as a whole.arrow_forwardA tariff is A. a tax imposed on imports. B. any non-subsidy used to increase trade. C. any non-tax action used to restrict trade. D. a subsidy granted to imports.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning