The diagram below shows a situation where the country would export the good. Price of Pencil Sharpeners $24 Domestic Supply World Price 16 12 Domestic Demand Quantity of Pencil Sharpeners 200 300 450 a.) How much will it export if free trade is allowed? b.) If the country goes from autarky to free trade the producer surplus will increase by $. pencil sharpeners
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- 1. Assume the Philippines is an importer of television in the United States. Consumers buy 800,000televisions per year, half of which are produced domestically, and half are imported. Assume thatthe world price is $150 each television. If there were no televisions sold, a local consumer'swillingness to buy is $400 and the costs to sellers is $100.A. Draw a diagram showing the world price, market supply and market demand for televisionin the local market.B. Show and calculate consumer and producer surplus at the world price. Show all the requiredsolutions.C. Suppose the Philippine government restricts the importation of television by putting a 20percent tariff rate. Suppose this tariff rate leads to a fall of the consumers demand to700,000 televisions each year, and local producers supply 500,000 each year. Illustratethese changes in your diagram above. How many televisions should the country imports?Calculate the change in consumer surplus, producer surplus and total surplus.D.…Which of the following statements is false? Question 7Answer a. If the United States imposes a tariff on Japanese car imports, the price of cars in the United States is likely to increase. b. If Japan imposes a quota on car exports to the United States, the price of cars in the United States is likely to increase. c. If the United States imposes a quota on Japanese car imports, the price of cars in the United States is likely to increase. d. If Japan imposes a subsidy on car exports to the United States, the price of cars in the United States is likely to increase.7. Consider a country that imports a good from abroad.For each of following statements, state whether it istrue or false. Explain your answer.a. “The greater the elasticity of demand, the greaterthe gains from trade.”b. “If demand is perfectly inelastic, there are no gainsfrom trade.”c. “If demand is perfectly inelastic, consumers donot benefit from trade.”
- The following diagram is for the lamp market in a small country. Under free trade, the world price of lamp is $13/1lamp. Under import tariff $2/lamp, the domestic price of lamp in the small country is $15/lamp. Price Supply S15 S13 Demand Quantity 10.000 12.000 32,000 50,000 Refer to the figure above. Domestic producer surplus would increase by because of the tariff. Select one: Oa. $55,000 O b. S5,000 OC $22.000 Od. $10,000> O ho signment - ECN204 021- Introductory Macroeconomics - W2023 apter 17 Assignment i 1 B 02:44:19 W b Success Confirmation 4+ HelpAssume the United States is an importer of televisionsand there are no trade restrictions. U.S. consumersbuy 1 million televisions per year, of which 400,000 areproduced domestically and 600,000 are imported.a. Suppose that a technological advance amongJapanese television manufacturers causes theworld price of televisions to fall by $100. Draw agraph to show how this change affects the welfareof U.S. consumers and U.S. producers and how itaffects total surplus in the United States.b. After the fall in price, consumers buy 1.2 milliontelevisions, of which 200,000 are produced domesticallyand 1 million are imported. Calculate thechange in consumer surplus, producer surplus,and total surplus from the price reduction.c. If the government responded by putting a$100 tariff on imported televisions, what wouldthis do? Calculate the revenue that would beraised and the deadweight loss. Would it be agood policy from the standpoint of U.S. welfare?Who might support the policy?d. Suppose that the…
- E4 Home’s demand curve for wheat is D = 200 − 40P Its supply curve is S = 40 + 40P Derive and graph Home’s import demand schedule. What would the price of wheat be in the absence of trade? Now add Foreign, which has a demand curve D∗ = 160 − 40P and a supply curve S ∗ = 80 + 40P 1. Derive and graph Foreignâs export supply curve and find the price of wheat that would prevail in Foreign in the absence of trade. 2. Now allow Foreign and Home to trade with each other, at zero transportation cost. Find and graph the equilibrium under free trade. What is the world price? What is the volume of trade? Home imposes a specific tariff of 0.5 on wheat imports. 1. Determine and graph the effects of the tariff on the following: (1) the price of wheat in each country; (2) the quantity of wheat supplied and demanded in each country; (3) the volume of trade. 2. Determine the effect of the tariff on the welfare of each of the following groups: (1) Home import-competing producers; (2) Home…The figure to the right shows the U.S. demand and supply for leather footwear. Suppose the government allows imports of leather footwear into the United States. What will be the domestic quantity supplied? OA. Qo OB. Q₁ OC. Q₂ OD. Q₂-20 CHI Price $54 30 24 0 R S V W X τυ % Q₁ Y Q₂ US Supply World price US Demand Quantity of leather footwearAssume Australia is an importer of sofas and there are no trade restrictions. Australian consumers buy 1 000 000 sofas per year, of which 450 000 are produced domestically and 550 000 are imported.a Suppose that a technological advance among Swedish sofa manufacturers causes the world price of sofas to fall by $200. Draw a graph to show how this change affects the welfare of Australian consumers and Australian producers, and how it affects total surplus in Australia.b After the fall in price, Australian consumers buy 1 150 000 sofas, of which 300 000 are produced domestically and 850 000 are imported. Calculate the change in consumer surplus, producer surplus and total surplus from the price reduction.c If the government responded by putting a $200 tariff on imported sofas, what would this do? Calculate the revenue that would be raised and the deadweight loss. Would it be a good policy from the standpoint of Australian welfare? Who might support the policy?d Suppose that the fall in…
- The figure shows trade in auto parts between the United States, Mexico, and Asia. Had the United States and Mexico failed to join the United States-Mexico-Canada (USMCA) free trade agreement, Mexico's supply curve would have been SMex. a. Shift Mexico's supply curve to show the impact of USMCA on this market. 20 19 18 17 S. Меx S' Mex 16 15 14 13 12 A 11 8 10 S. +t Asia S Asia 8 4 3 2 M US 1 20 40 60 80 100 120 140 160 180 200 Import Quantity b. Who supplies auto parts to the United States? Does the United States import a larger quantity of auto parts after USMCA; that is, does trade creation occur? After the USMCA was established, Mexico and Asia supply - auto parts to the United States. The United States imports the same amount of - auto parts after USMCA. Trade creation does not occur - c. What is the change in government revenue compared with before USMCA? -30 Change in government revenue: $ Price ($)plz help Assume country A produces and consumes cupboards. The autarky price of a cupboard in country A is USD100 and the domestic production and consumption in the absence of trade is 160 units. Assume further that the free trade of cupboards is USD40, explain the partial equilibrium effect of a 50% tariff imposed by Country A on cupboards.a. In the absence of trade, what is the equilibrium price and equilibrium quantity?b. The government opens the wheat market to free trade and U.S enters the Turkish market,pricing wheat at $40 per ton. What will happen to the domestic price of wheat? What will bethe new domestic quantity supplied and domestic quantity demanded? How much wheat willbe imported from U.S?c. The government imposes a $10 per ton tariff on all imported wheat. What will happen tothe domestic price of wheat? What will be the new domestic quantity supplied and domesticquantity demanded? How much wheat will now be imported from U.S?d. How much revenue will the Turkish government receive from the $10 per ton tariff?