7. (Figure: The Domestic Market for Sugar) Use Figure: The Domestic Market for Sugar. Assume that PA is the domestic equilibrium price without trade and that PW is the world price. Before international trade, consumer surplus is equal to the area: Price of sugar (per ton) D РА A B C P JE D Qo Q₁ Qs Domestic supply Domestic demand
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- Explain how a subsidy on agricultural goods like sugar adversely affects the income of foreign producers of imported sugar.Assume a perfectly competitive market and the exporting country is small. Using a demand and supply diagram, show the impact of increasing standards on a low-income exporter of toys. Show the tariffs impact. Is the effect on toy prices the same or different? Why is a standards policy preferred to tariffs?8) Suppose the United States imposes a tariff or quota on sugar imports. For each of the following, enter the letter G ifit will gain from the tariff or quota or enter the letter L if it will lose from the tariff or quota.Domestic sugar producers and their workers _______Consumers _______Industries that use sugar and their workers _______9) _______________ are goods and services produced domestically but sold to other countries. _______________ are goods and services bought domestically but produced in other countries._______________ are taxes imposed by a government on imports of a good into a country. a,Tarrifs b, exports c,quotas D,Imports 10) Which of the following are non-tariff barriers to trade?National security grounds.Health and safety requirements.Embargoes.All of the above.
- 14. Use the market below to answer the following questions and assume that it is open to international trade. $850 Sus $425 $350 Sworld $250 Dus 50 70 85 100 120 a) If the government set an import quota of 30 units, what would be the prevailing price in the market? ($ type your answer. b) What size tariff would the government need to implement to prevent international trade from occurring? ($ type your answer.57. Price, P 48- 44- 40- 36- 32- 28- 24- 20- 16- 12- 8- 4- 0- 9 10 11 12 Quantity, Q Refer to the above figure: the importing country imposes a tariff that raises the domestic price from $16 to $24. But lowers the export price from $16 to $8. What is the gain in producer surplus? O A. $8 о в. $24 O C. $36 O D. $32 77. Price, P 487 44- 40- 36- 32- 28- 24- 20- 16- 12- 8- 4- 0- 1 10 11 12 Quantity, Q 2 8. Refer to the above figure: The importing country imposes a tariff that raises the domestic price from $16 to $24. But lowers the export price from $16 to $8. As a result of the tariff government revenue is respectively. and the prodution distortion loss is O A. $16: $8 O B. $16: $4 OC. $32: $8 O D. $32: $4 30. CHAMPAGNE aLW= 5 hours per gallon a'Lw = 4 hours per gallon STRAWBERRIES НОМЕ FOREIGN aLc = 4 hours per pound a'lc = 2 hours per pound Which of the following statements are true? O A. Home has the absolute advantage in both strawberries and champagne and the comparative advantage…▪Figure: The Home and World Markets ▪ The supplied graph shows the case for a tariff imposed by a large country. Home market World market Price I $36 $30 $26 SO 20 40 80 100 Quantity Price C) $160; $120 'D) $120; $120 40 80 X + 1 Imports Q1. (Figure: The Home and World Markets) The terms-of-trade gain is deadweight loss is 'A) $120; $160 'B) $160; $160 and the ↑. 1. ↑. ↑.
- 7. Lobbying for or against trade restrictions Trade restrictions affect the overall welfare of an economy, sin'ce they change the price consumers pay for a good and the quantity produced and consumed domestically. Trade restrictions, such as quotas, usually benefit domestic ▼ and hurt domestic since they the domestic price of a good. True or False: Producers find it difficult to exert the political influence needed to establish trade restrictions, because the benefits to producers are very small and widely dispersed, which makes it difficult for producers to organize. O False O True(Figure: The Market for Calculators) Use Figure: The Market for Calculators. Assume that S and D represent the domestic demand and supply of calculators. The world price, Pw, equals $100. The government imposes a quota restricting imports to 25 calculators. The domestic price rises to and the quota rent is equal to area Figure: The Market for Calculators Price of calculators $300 150 120 100 50 0 A 3.0: F G 23**** H:1 35 50 60 $120; K + L $150; G+H+I+J $120; H+ I $150; K+ H+I+L PW Quantity of calculators6. The accompanying table indicates the U.S. domestic demand schedule and domestic supply schedule for commercial jet airplanes. Suppose that the world price of a commercial jet airplane is $100 million. Price of jet Quantity of jets (millions) demanded $120 100 110 150 100 200 €1090 11 250 300 350 400 82859 80 70 60 50450 40 500 Quantity of jets supplied 1,000 900 800 700 600 500 400 300 200 a. In autarky, how many commercial jet airplanes does the United States produce, and at what price are they bought and sold? b. With trade, what will the price for commercial jet airplanes be? Will the United States import or export airplanes? How many?
- 3 1190 Domestic Demand E 1140 1090 PRICE (Dollars per ton) 1040 990 940 890 840 790 740 690 0 10 20 + I 1 1 R 30 40 50 60 70 QUANTITY (Tons of limes) A tariff set at this level would raise $ F If Zambia is open to international trade in limes without any restrictions, it will import % Domestic Supply 5 T Suppose the Zambian government wants to reduce imports to exactly 40 tons of limes to help domestic producers. A tariff of achieve this. G 1 I 6 P. 80 90 100 W Y in revenue for the Zambian government. H & 7 ? U 8 00 J tons of limes. Grade It Now 9 K O per ton will Save & Continue Continue without eaving O PQuestion 26 ++++++ 2222 NA 30 28 26- 24- 20 Price NA 00 18- 16- 14+ 12 10- World price Domestic supply Domestic demand 20 40 60 80 100 120 140 160 180 200 220 240 260 200 300 Quantity Note that supply curve starts at $2 on the vertical axis, and that equilibrium (domestic) price before trade is $15. Total surplus after trade is. a $3,600 b.$1,620 c $1,940 d none of the above TPrice (dollars per shirt 44 40 36 32 28 24 20 16 12 0 8 16 24 32 40 48 56 64 Quantity (millions of shirts per year) D The figure shows the market for shirts in the United States, where D is the U.S demand curve and S is the U.S. supply curve. The world price is $20 per shirt. The United States imposes a tariff on imported shirts, $4 per shirt. In the figure above, U.S. producers' gain; $128 million O loss; $32 million O loss: $64 million O gain; $80 million from the tariff is