Export subsidies result in a welfare loss to the home country due to the protective and consumption effects. In order to determine the magnitude of these effects, you must compare the change in consumer and producers surplus against the cost of the subsidy. On the previous graph, use the green quadrilateral (triangle symbols) to indicate the loss in consumer surplus due to the export subsidy. Then use th purple quadrilateral (diamond symbols) to indicate the gain in producer surplus as a result of the export subsidy. The taxpayer cost of the export subsidy equals $
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- The following graph shows the market for wheat in Canada, where Dc is the demand curve, Sc is the supply curve, and Pw is the free trade price of wheat. Assume that Canada is a relatively small producer of wheat, so changes in its output do not affect the world price of wheat. Also assume that Canada is currently open to free trade, and domestic consumers are able to purchase wheat at the world price with negligible transportation costs. Suppose a subsidy of $80 per ton is granted to exporters in Canada, allowing them to sell their products abroad at prices below their costs. Assume that trade restrictions are also put in place in order to prevent domestic consumers from buying wheat abroad at the world price. Use the grey line (star symbols) to indicate the world price of wheat plus the subsidy on the following graph. Then use the black point (plus symbol) to indicate the price of wheat in Canada and the quantity demanded at that price. Finally, use the tan point (dash symbol) to…The following graph shows the market for wheat in Canada, where Dc is the demand curve, Sc is the supply curve, and Pw is the free trade price of wheat. Assume that Canada is a relatively small producer of wheat, so changes in its output do not affect the world price of wheat. Also assume that Canada is currently open to free trade, and domestic consumers are able to purchase wheat at the world price with negligible transportation costs. Suppose a subsidy of $80 per ton is granted to exporters in Canada, allowing them to sell their products abroad at prices below their costs. Assume that trade restrictions are also put in place in order to prevent domestic consumers from buying wheat abroad at the world price. Use the grey line (star symbols) to indicate the world price of wheat plus the subsidy on the following graph. Then use the black point (plus symbol) to indicate the price of wheat in Canada and the quantity demanded at that price. Finally, use the tan point (dash symbol) to…The following graph shows the market for wheat in Canada, where Do is the demand curve, Sc is the supply curve, and Pw is the free trade price of wheat. Assume that Canada is a relatively small producer of wheat, so changes in its output do not affect the world price of wheat. Also assume that Canada is currently open to free trade, and domestic consumers are able to purchase wheat at the world price with negligible transportation costs. Suppose a subsidy of $80 per ton is granted to exporters in Canada, allowing them to sell their products abroad at prices below their costs. Assume that trade restrictions are also put in place in order to prevent domestic consumers from buying wheat abroad at the world price. Use the grey line (star symbols) to indicate the world price of wheat plus the subsidy on the following graph. Then use the black point (plus symbol) to indicate the price of wheat in Canada and the quantity demanded at that price. Finally, use the tan point (dash symbol) to…
- Refer to Figure 3.6, page 55. Assume that the graph depicts the U.S. domestic market for corn. How many bushels of corn, if any, will the United States export or import at a world price of $1, $2, $3, $4, and $5? Use this information to construct the U.S. export supply curve and import demand curve for corn. Suppose the only other corn-producing nation is France, where the domestic price is $4. Which country will export corn; which will import it?The following graph shows the domestic demand for and supply of oranges in Venezuela. The world price (Pw) of oranges is $545 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with international trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 905 Domestic Demand Domestic Supply 865 825 785 745 ☑ 705 665 625 585 545 PRICE (Dollars per ton) 505 0 30 60 90 120 150 180 210 240 270 300 QUANTITY (Tons of oranges) (?) Because New Zealand participates in international trade in the market for maize, it will import tons of maize. Now suppose the New Zealand government decides to impose a tariff of $120 on each imported ton of maize. Under the tariff, the…If Guatemala is open to international trade in oranges without any restrictions, it will import Suppose the Guatemalan government wants to reduce imports to exactly 120 tons of oranges to help domestic producers. A tariff of S will achieve this. A tariff set at this level would raise S tons of oranges. in revenue for the Guatemalan government. per ton
- Suppose New Zealand is open to free trade in the world market for maize. Since New Zealand is small relative to the international market, the demand for and supply of maize in New Zealand have no impact on the world price. The following graph shows the domestic market for maize in New Zealand. The world price of a ton of maize is Pw $800. = On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). PRICE (Dollars per ton) 1150 1100 1050 1000 950 900 850 800 750 700 650 0 Domestic Demand 5 Il a small country 10 15 Domestic Supply 20 25 30 35 QUANTITY (Tons of maize) Pw 40 45 50 CS PS Because New Zealand participates in international trade in the market for maize, it will import Use the following graph to show the effects of the $50 tariff. tons of maize. Now suppose the New…The United States simultaneously limits imports of ethanol for fuel purposes, and provides incentives for the use of ethanol in gasoline, which raise the price of ethanol by about 15 percent relative to what it would be otherwise. We do, however, have free trade in corn, which is fermented and distilled to make ethanol, and accounts for approximately 55 percent of the cost. The effective rate of protection on the process of turning corn into ethanol is percent. (Round your response to the nearest whole number.)Suppose Jordan is open to free trade in the world market for maize. Since Jordan is small relative to the international market, the demand for and supply of maize in Jordan have no impact on the world price. The following graph shows the domestic market for maize in Jordan. The world price of a ton of maize is Pw = $800. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). PRICE (Dollars per ton) 1280 1220 1160 1100 1040 980 920 860 800 740 680 0 Domestic Demand 25 50 Domestic Supply PIN 75 100 125 150 175 200 225 250 QUANTITY (Tons of maize) CS PS ? Because Jordan participates in international trade in the market for maize, it will import tons of maize. Q Search
- The following graph shows the domestic demand for and supply of oranges in Zambia. The world price (Pw) of oranges is $525 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with international trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. PRICE (Dollars perton) 845 805 765 725 685 645 605 565 525 485 445 0 Domestic Demand 10 20 Domestic Supply 30 40 50 60 70 QUANTITY (Tons of oranges) P W 80 90 100 If Zambia is open to international trade in oranges without any restrictions, it will import ? tons of oranges.The following graph shows the domestic demand for and supply of oranges in Honduras. The world price (Pw) of oranges is $550 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with international trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. PRICE (Dollars per ton) 865 830 795 760 725 690 655 620 585 550 515 0 Domestic Demand 40 80 Domestic Supply PW 120 160 200 240 280 320 360 400 QUANTITY (Tons of oranges) ?The following graph shows the domestic demand for and supply of oranges in Guatemala. The world price (Pw) of oranges is $540 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with international trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. PRICE (Dollars per ton) 990 940 890 840 790 740 690 640 590 540 490 Domestic Demand 50, 540 +➡+ I I 0 50 Domestic Supply PW 100 150 200 250 300 350 400 450 500 QUANTITY (Tons of oranges) A tariff set at this level would raise $ ? If Guatemala is open to international trade in oranges without any restrictions, it will import Suppose the Guatemalan government wants to reduce imports to exactly 100 tons of…