Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 9, Problem 3SPPA
To determine
The change in
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Assume that Canada is an importer of televisions and that there are no trade restrictions. Canadian consumers buy 1.2 million televisions per year, of which 600,000 are produced domestically and 600,000 are imported.
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After the fall in price, consumers buy 1.4 million televisions, of which 400,000 are produced domestically and 1 million are imported. Calculate the change (this will be only the area either gained or lost by consumers and producers) in consumer surplus, producer surplus and total surplus due to price reduction. Provide numerical answers by calculating the area of change in surplus due to fall in…
Vietnam has a policy of free trade in motorcycles which are sold in world markets at a price of 10,000 per motorcycle.
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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.
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 Canadian consumers and Canadian producers and how it affects total surplus in Canada.
a.
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…
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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