International Economics
16th Edition
ISBN: 9781305887633
Author: Robert Carbaugh
Publisher: Cengage Learning
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Chapter 4, Problem 6SQ
To determine
Explain whether the statement it is true or false.
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- Evaluate the effects of an import tariff by the government of a small country. Explain in detail the effects of an import tariff on the economic welfare of the small country. Describe the potential advantages to the economy if the government offers an export subsidy.arrow_forwardVietnam has a policy of free trade in motorcycles which are sold in world markets at a price of 10,000 per motorcycle. Under free trade, Vietnam produces 100,000 motorcycles and imports 100,000 motorcycles. To provide some protection to the domestic industry, Vietnam imposes an import tariff of $1500 per motorcycle. With this tariff in place, production in Vietnam rises by 5,000 motorcycles and consumption drops by the same amount. Calculate the effects of the tariff on: a. Consumer Surplus b. Producer Surplus c. Government Revenues d. Overall Welfare e. If the tariff imposed by the Vietnamese had led to small reduction in world prices of, say, 250 dollars, how, qualitatively, would the welfare calculations (a), (b), (c) and (d) above change?arrow_forwardThe aim of a tariff is to: (a) maximise total surplus. (b) protect domestic consumers. (c) protect domestic producers. (d) create deadweight loss.arrow_forward
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- In 2019, Japan had a tariff on canola oil imports from Canada of 13.2 yen per kg. This same year, Japan imported approximately 35 million kg of canola oil from Canada. How much tariff revenue did the Japanese government generate in 2019? (Do not include the extra zeros for millions in your answer.)arrow_forwardWhen a large country imposes a tariff for a certain good it imports,it often affects the foreign price of the good as well. Is this statement true? Justify the answerarrow_forwardSuppose the Italian government imposes a tariff on imported lumber products. The effect this tariff has on the Italian lumber market is to ______ domestic prices, ______ consumer surplus, and ______ producer surplus.arrow_forward
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