PRICE (Dolars per a to 12 Supply after the subsidy, the price producers receive is Demand 24 M QUANTITY (Milions of toys per year 2. 14 and the price pa
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- 1. Consider the following policies, each of which is aimed at reducing violent crime by reducing the use of guns. Illustrate by demand and supply diagrams folowed with an explanation the effect of each of these proposed policies. [Hint: For each question, show the price paid by consumers, the price received by producers, and the quantity of guns sold, the difference between the price paid by consumers and the price received by producers, has the number of guns sold increased or decreased] ed at A tax on gun buyers a. b. A tax on gun sellers A binding price floor on guns с. d. A tax on gun ammunition8. Suppose we want regular cars to be gradually replaced by electric cars. There are several kinds of government interventions that could be used to make this happen, or at least to push the car market to produce and sell more electric cars. Explain how a tax could be used for this purpose, and then explain how a subsidy could be used for this purpose.4. Effect of quotas on local consumers and producers The following graph shows the U.S. domestic market for toys. PRICE() 20 -α- 18 Domestic Supply Domestic Demand 10 14 4412 18 24 30 34 Domestic Supply Ро Donaje Demand PH 42 QUANTITY (Mans of toys) 54 60 In the absence of trade with China, the equilibrium price of a toy is domestic quantity supplied equal million toys. At this price, both the domestic quantity demanded and the Suppose that trade between the United States and China is open and that the United States initially imposes no tariffs or quotas on toys imported from China. Assume that China has a comparative advantage in producing toys and charges the world price of $6 per toy. (Note: Throughout the problem, assume that the amount demanded by any one country does not affect the world price of toys.) On the graph, use the grey line (star symbol) to indicate the world price of toys. At the world price of $6 per toy, the quantity of toys demanded by U.S. buyers is milion toys,…
- 8. Assume that the production of cement also produces a substantial amount of air pol- lution and that a technology is available that can lower the pollution but with some- what higher production costs for the cement. Because of the availability of raw materials in Lindertania, it produces large amounts of cement, and its exports supply most demand in Pugelovia. But the air pollution from Lindertania's production blows into Pugelovia, causing a noticeable deterioration in Pugelovia's air quality. Although Lindertania suffers some harm itself from this air pollution, it does not now have any policy to reduce the pollution. The Pugelovian government wants to address this air pollution problem. a. If the two countries' governments cooperate, what is the best solution to address the problem? Explain. b. If Pugelovia must come up with a solution on its own, what should the Pugelovian government do? Explain.1. Please explain what would happen to the market-clearing prices and quantities of e- cigarettes in the U.S. under the following hypothetical scenarios. a. Widespread reporting of e-cigarette or vaping use-associated lung injury (EVALI) increased the health risk concerns about vaping among existing e-cigarette users.16. What is the difference between an agricultural export subsidy and an agricultural production subsidy?
- 1. Assume that the markets for sugar cane, rum and whiskey are initially in equilibrium. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes in consumption. The government implements a price restriction in the sugar cane market with the aim of protecting the farmers. What type of price restriction is implemented by the government? Explain. Discuss the effect on each market if the government implements a price restriction in the sugar cane market with the aim of protecting the farmers. Illustrate the effect on each market if the government implements a price restriction in the sugar cane market with the aim of protecting the farmers. 2. Covid-19 has impacted the tourism market of a developing country in the caribbean, this type of market failure is a Negative externality. Discuss why market failure occurs in this scenario. Suggest a relevant government policy that would yield the efficient outcome and carefully…Price (dollars per gallon) S2 $5.50 3.50 2.50 D Quantity (millions of gallons per month) 30 40 45 Assume the graph above illustrates a new tax put into the market for soft drinks. S2 is the supply curve with the $2 tax in place. What price would consumers pay if the tax was placed on consumers instead of producers? 1) $2.00 O 2) $3.50 3) $2.50 4) $1.50The following graph shows intra-industry trade in the United States for two types of yogurts: Yoplait (a famous French brand) and Dannon (a famoud American brand): 13 12 11. 10 A 9 83 7 2 1 0 -1 10 1 -11 CHG. O GHOI. O HLP. US Market for Yoplait (Y) Supply of Yoplait O GHPK. 8 Demand for Yoplait 9 10 11 12 13 Yoplak 15 12 Price 11 10 A 0 1 2 US Market for Dannon (D) Refer to the above graph. At the price of $6 for Y, and relative to an autarkic situation, intra- industry trade leads to a loss for producers of: Supply of Dannon Demand for Dannon Dannon 10 11 12 13
- China is a major producer of grains, such aswheat, corn, and rice. Some years ago, the Chinesegovernment, concerned that grain exports weredriving up food prices for domestic consumers,imposed a tax on grain exports.a. Draw the graph that describes the market for grainin an exporting country. Use this graph as thestarting point to answer the following questions.b. How does an export tax affect domestic grainprices?c. How does it affect the welfare of domesticconsumers, the welfare of domestic producers,and government revenue?d. What happens to total welfare in China, asmeasured by the sum of consumer surplus,producer surplus, and tax revenue?1. Retail Promotion Programs Successful retail promotion programs have the capacity to generate additional producer surplus, but it depends en the size of the relative shifts in demand and supply. Please sketch out a supply and demand figure for RTE breakfast cereal sold in retail markets that adopt a promotion campaign; this program increases demand and also leads to an increase in advertising cests that is paid for by the retailer. Now assume (and label your figure) with the following: the initial equilibrium quantity was 100,000 boxes, the quantity with the promotion in place is 105,000 boxes, the initial price was $10 per box, the price with the promotion in place is S10.15 per box, and initial fixed costs were $2 per box. Would the promotion efforts be worthwhile to retailers if: a) b) c) The promotion was funded by a $0.20/box fee? A S0.50 fee/box? A S0.60 fee/box?If the United States implements a subsidy on domestic salmon, this will Question 5Answer a. increase the amount of salmon imported into the United States and increase the production of salmon in the United States. b. reduce the amount of salmon imported into the United States and reduce production of salmon in the United States. c. increase the amount of salmon imported into the United States and reduce the production of salmon in the United States. d. reduce the amount of salmon imported into the United States and increase the production of salmon in the United States. Clear my choice CheckQuestion 5