12 Price per Tonne($)1,3001,3501,4001,4501,5001,5501,6001,650QuantityDemandedDomestically150145Domestic production:Imports:140135130125120115a) What is the present equilibrium price and domestic production?Price: $Domestic production:Price: $Domestic production:tonnes.QuantitySuppliedDomestically50658095110125140165b) Suppose that Canada now opens up to free trade and the world price of wool is $1,300 per tonne. How much wool will Canadaproduce domestically, and how much will it import?Closed to trade.c) Assume that the Canadian government, under pressure from the Canadian wool industry, decides to impose an import quota of 20tonnes. What will be the new price, and how much will the Canadian industry produce?tonnes.d) Now suppose that the Canadian government decides to replace the import quota with a tariff. If it wishes to maintain domesticproduction at the same level as with a quota, what should be the amount of the tariff, and how much revenue will government receive?Tariff: $Tariff revenue: $< Prev12 of 40HH

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Price per Tonne ($) 1,300 1,350 1,400 1,450 1,500 1,550 1,600 1,650 Domestic production: Imports: Quantity Demanded Domestically 150 145 140 a) What is the present equilibrium price and domestic production? Price: $ Domestic production: 135 130 125 120 115 Price: $ Domestic production: b) Suppose that Canada now opens up to free trade and the world price of wool is $1,300 per tonne. How much wool will Canada produce domestically, and how much will it import? di Nour tonnes. Quantity Supplied Domestically 50 65 80 95 110 125 140 165 c) Assume that the Canadian government, under pressure from the Canadian wool industry, decides to impose an import quota of 20 tonnes. What will be the new price, and how much will the Canadian industry produce? tonnes.

Price per Tonne ($) 1,300 1,350 1,400 1,450 1,500 1,550 1,600 1,650 Domestic production: Imports: Quantity Demanded Domestically 150 145 140 a) What is the present equilibrium price and domestic production? Price: $ Domestic production: 135 130 125 120 115 Price: $ Domestic production: b) Suppose that Canada now opens up to free trade and the world price of wool is $1,300 per tonne. How much wool will Canada produce domestically, and how much will it import? di Nour tonnes. Quantity Supplied Domestically 50 65 80 95 110 125 140 165 c) Assume that the Canadian government, under pressure from the Canadian wool industry, decides to impose an import quota of 20 tonnes. What will be the new price, and how much will the Canadian industry produce? tonnes.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter34: Globalization And Protectionism

Section: Chapter Questions

Problem 2SCQ: Explain how a subsidy on agricultural goods like sugar adversely affects the income of foreign...

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Which of the following represents the domestic demand for goods? OC+I+G - IM/ɛ OC+I+ G+ X + ɛIM OC+I+G + X OC+I+G + X- ɛM/ɛ %3D OC+I+ G
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