Bundle: Essentials Of Economics, Loose-leaf Version, 8th + Lms Integrated Mindtap Economics, 1 Term (6 Months) Printed Access Card
8th Edition
ISBN: 9781337368087
Author: N. Gregory Mankiw
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
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.
Expert Solution & Answer
Trending nowThis is a popular solution!
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
Bundle: Essentials Of Economics, Loose-leaf Version, 8th + Lms Integrated Mindtap Economics, 1 Term (6 Months) Printed Access Card
Knowledge Booster
Similar questions
- B. If Oman imposing an import tariff on the used car imports from UAE (Foreign), explain the cost and benefits tariff as an importing country to Oman and an exporting county to UAE(Use appropriate diagram to explain your answer). Your answer can limit based on following theoretical assumptions: Suppose that there are two countries Home (Oman) and Foreign. Both countries consume and produce used cars which can be costless transported between these countries. In each country, it is a competitive industry. Suppose that in the absence of trade the price of used cars at Home exceeds the corresponding price at Foreign. C. If Oman allowing an export subsidy to Diagrammatically explain its effects on the Oman market (Exporting country) and as an importing country to UAE market. Your answer can limit based on following theoretical assumptions: our vegetable exporters to UAE, Suppose that there are two countries Home (Oman) and Foreign (UAE). Both countries consume and produce vegetables, which…arrow_forwardSuppose there is a policy debate regarding Canada's imposing trade restrictions on imported semiconductors: The prime minister of Canada argues that Canada should threaten to impose a tariff on Chinese semiconductors in order to induce the Chinese to remove its tariff on Canadian cars. Which of the following justifications is the prime minister using to argue for the trade restriction on semiconductors? Unfair-competition argument Infant-industry argument Jobs argument National-security argument Using-protection-as-a-bargaining-chip argumentarrow_forwardPlease solve these parts with step-by-step calculations and brief explanations. Thanks.arrow_forward
- Suppose a small country Neverland exports only silver and gold. These two industries employ 40% of the population of Neverland. Export is equal to 50% of Neverland's GDP. 60% of all the export revenue Neverland obtains from silver export. Other things being equal, if the price of silver on the world market goes up by 20%, by how much Neverland's welfare will change? [Type your answer in percent (to the first decimal point) and use sign for the direction of change, i.e. if your answer is "goes up by 20.56%" type 20.6, if your answer is "goes down by 20.34%" type -20.3.] Answer: xarrow_forward.arrow_forwardIn an international market, we say that a country will be an (Blank) of a good if it has the (Blank) advantage in producing that good Answer options exporter and comparative exporter and absolute importer and comparative importer and absolutearrow_forward
- As you may have heard, Russia decided to invade its neighbor, which has led to international condemnation (albeit not on all fronts). The EU, a former major importer of gas from Russai, went ahead with sanctions. Imagine, if you will, that the respective heads of state get together and try to negotiate a trade agreement to end sanctions. They each have three possible choices: (a) Maintain tariffs against the other nation (T); (b) Seek mediation from the WTO, which would implement an international trade agreement at a small cost (M); (c) Unilaterally remove tariffs (F). The payoff matrix is as given below. Is there a dominant strategy for either player? Find all the (pure strategy) Nash equilibria in the game. How would this change if, instead, the mediation is costless and yields a payoff of 50 to each nation (assuming mutually successful mediation) and a payoff of 0 (if the other nation chooses otherwise)? **arrow_forwardPlease answer only if you are sure about the correct answers:arrow_forwardplease helparrow_forward
- Assume that the functions of a demand curve and of a supply curve of a small country M for commodity X are Dx = 130 – Px and Sx = -10 + Px respectively. The unit price of commodity X imported from the rest of the world is 10 USD in the condition of the free trade. Draw the graph and calculate the increase of the producer’s surplus, the decrease of the consumer’s surplus, and the government revenue if the country M would impose the import tariff at the rate of 20% on the commodity X imported from the rest of the world?arrow_forwardAssume that the domestic supply and demand for a good are given by the following equations. Q = 500 – 20 P Q = 80 + 10 P If the world price is $10 what is the free trade level of imports? Calculate the net welfare effects of a quota of 60 units. (Quota rent goes to foreign suppliers ( VERS) . Use also graph to show the effects of this quota. If %30 tariff imposed on the world price(10$) , what will be net welfare effects? Compare this welfare effect with the one in (a) and comment. Use a new graph to show the effects. Suppose the domestic industry is a Monopoly, with which commercial policy instrument ( quota or tariff? - assuming both of them yields the same level of imports- ) would it prefer to be protected and why? Explain.arrow_forwardConsider the case of the following large country (all prices are measured in euros, and quantities are measured in single units):– Domestic demand curve: P = 3600 –3Q– Domestic supply curve: P = 2Q– World free trade price of imports = 140 euros per unit– When the tariff is introduced, domestic prices rise by exactly one third of the amount of the tariff. Calculate the following. Also show your workout. Draw a diagram depicting the importing country market under free trade and with a tariff. Under free trade equilibrium:The quantity consumed domestically: ___________________________________________________The quantity produced domestically: ___________________________________________________The quantity imported: ______________________________________________________________ With a 30 euro specific tariff :The equilibrium quantity consumed domestically: _________________________________________The equilibrium quantity produced domestically: __________________________________________The…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning