Essentials of Economics (MindTap Course List)
7th Edition
ISBN: 9781285165950
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 9, Problem 4PA
Subpart (a):
To determine
The arguments against and for imports and international trade.
Subpart (b):
To determine
The arguments against and for imports and international trade.
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Students have asked these similar questions
Using letters ON the DIAGRAM, explain the answer,
(a) If foreign trade is allowed and the world price is USD 10,000 per automobile explain the winners and losers and overall well-being. Use the letters indicated to explain your answer.
(b) If the government imposed a tariff of USD 5,000 per unit, what is the government revenue and the dead-weight loss of tariff.
In the picture below is the full question. The highlighted one is my guess which is wrong.
Which of the following best explains how subsidies work as a trade restriction?
A)They increase competition for a new business, forcing it to be more productive, and lowering prices for consumers.
B)They limit the import of foreign goods and create shortages.
C)They place a tax on foreign goods, making foreign good expensive, increasing demand for domestic goods(this one is wrong)
D)Governments pay producers, offsetting costs, increasing supply, lowering prices, and reducing foreign competition.
Consider the market for sugar in the United States depicted in the figure to the
right. Assume the world price of sugar is $0.04 per pound, and at that price the
United States can buy as much sugar as it wants without causing the world price
to rise.
Now suppose a tariff imposed by the government completely eliminates trade.
As a result of the tariff, consumers will be
surplus, and producers will be
off in terms of consumer
off in terms of producer surplus.
Use the traingle drawing tool to indicate the total loss of surplus for the United
States as a result of the tariff by shading in domestic dead weight loss. Property
label this shaded area.
Carefully follow the instructions above, and only draw the required objects.
Price of sugar (per pound)
0.36
0.32-
0.28-
0.24-
0.20
0.16
0.12-
0.08
0.04+
0.00+
0
Supply
World Price
Demand
4 12 16 20 24 28 32 36 40
Quantity of sugar (billion pounds per year)
Odu
Chapter 9 Solutions
Essentials of Economics (MindTap Course List)
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