cer surplus and consumer surplus, while total U.S. welfare decreased. Over the past two years, the prices of new cars and used cars showed sig h. The price increases in new and used cars were both caused by the dec y due to the semiconductor shortage. Charles dislikes Red Vines Licorice®. His indifference curves are positively or curves with positive vertical intercepts with Red Vines Licorice on the h nd other snacks on the vertical axis. CPI (Consumer Price Index) measures the cost for a fixed amount of prod me basket. One criticism is that it ignores the substitution effect and could
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- 3/25/22, 10:55 PM Assignment Print View 4. The graph below shows the market for tires in the United States, a nation that is open to international trade but is assumed to be a price taker unable to affect the world price of tires. Market for Tires 320 Tools -- 280 New Equilibri Qs+ quota 240 S+ Quota 200 160 120 80 P. (280, 80) 40 40 80 120 160 200 240 280 320 Quantity (millions of tires) a. Using the graph above, at the world price of $80 per tire, how many tires will the United States import? million tires Now suppose the U.S. government imposes a quota as shown in the graph above. b. Using this same graph, indicate the new market equilibrium with the quota imposed and the domestic quantity supplied (Qs). https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=4.&postSubmissionView=13252718327623084&wid=13252718466068729&rol... 1/3 Price (dollars per tire)00 7 F. PRICE (Dollars per ton) 4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for soybeans in Honduras. The world price (Pw) of soybeans is $530 per ton and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of soybeans and that there are no transportation or transaction costs associated with international trade in soybeans. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 2. Domestic Demand Domestic Supply 770 740 710 680 650 620 06 P, 530 MacBook Pro Search or type URL 4. 51 9.France Germany Total Market PriceQuantity Quantity Quantity Quantity Quantity Quantity (per litre) Demanded Supplied DemandedSupplied Demanded Supplied 12 11 10 19 8 17 $424 519 615 712 810 99 13 12 14 15 4 16 17 15 6 18 17 Refer to the information above to answer this question. Assume that France and Germany enter into a free trade agreement (and there are no extra transportation costs, etc.) what are the equilibrium price and quantity of wine?
- 45) The General Agreement on Trade in Services (GATS) defines trade in service s the supply of a service through which of the following? a) Consumption abroad b) Cross-border supply c) Both A and B d) Neither A nor BInternational Trade – End of Chapter Problem - The accompanying table provides data regarding domestic demand and domestic supply of apples in the United States. Quantity supplied domestically (millions of pounds per year) Price Quantity demanded domestically (per apple) (millions of pounds per year) 0.15 6,290 9,730 0.25 7,150 8,870 0.35 8,010 8,010 0.45 8,870 7,150 0.55 9,730 6,290 a. Based on the information provided in the table, move the points to plot the domestic demand and domestic supply curves in the graph. Market for apples 80 75 Consumer surplu.. Domestic demar 70 65 Producer surplu... Domestic supp. 601. The United States currently imports all of its coffee. The annual demand for coffee by U.S. consumers is given by the demand curve Q = 250 – 10P, where Q is quantity (in millions of pounds) and P is the market price per pound of coffee. World producers can harvest and ship coffee to U.S. distributors at a constant marginal (= average) cost of $8 per pound. U.S. distributors can in turn distribute coffee for a constant $2 per pound. The U.S. coffee market is competitive. Congress is considering a tariff on coffee imports of $2 per pound. a. If there is no tariff, how much do consumers pay for a pound of coffee? What is the quantity demanded? b. If the tariff is imposed, how much will consumers pay for a pound of coffee? What is the quantity demanded? c. Calculate the lost consumer surplus. d. Calculate the tax revenue collected by the government. e. Does the tariff result in a net gain or a net loss to society as a whole?
- Discuss the price elasticity of demand and the price elasticity of supply of goods that have low value but are limited in supply. Discuss why the reduction in world price of such commodities can be considered harmful to an economy that exports such commodities.part a The effect of a tariff on the quantity demanded of an imported commodity: a will be higher the greater the elasticity of its demand. b will be lower the greater the elasticity of its demand. c does not depend on its elasticity of demand. d will only depend on its elasticity of supply. part b: In a market supplied by both domestic and foreign producers the government establishes a quota on imports at a level below current imports. The quantity sold by domestic producers will ______________ and the equilibrium quantity in the market overall will ______________. a not change; not change b increase; decrease c decrease; decrease d decrease; not change Part C: The picture attachedProblem 5. a) Which areas are in the graph are deducted from the consumer surplus as a result of tariff? Estimate the value of imports with tariff c) Estimate Imports without tariff b) d) Estimate tariff revenue production inefficiency and deadweight loss e) Estimate the additional producer surplus as a result of the tariff imposition. Price of rice P = PhP 73.75| Pw = PhP 70.00| C A D 0 25 50 B E F Domestic supply ↑ Tariff Domestic demand 100 125 World price Quanti of rice
- 5. A graphical comparison of tariffs and quotas Alagir and Ertil are small countries that protect their economic growth from rapidly advancing globalization by limiting the import of rugs to 20 million. To this end, each country imposes a different type of trade barrier when the world price (Pw) is $2,000. In Alagir, the government decides to impose a tariff of $3,000 per rug; in Ertil, the government implements a quota of 20 million rugs. Assume that Alagir and Ertil have identical domestic demand (Do) and supply (S) curves for rugs as shown on the following graph. Under these conditions, the price of rugs is $5,000 per rug in each country. 10000 ( ) 8000 8000 7000 8000 5000 4000 3000 2000 1000 0 0 Pu 10 Do 20 D₁ XX ✩ XX 30 40 50 60 70 QUANTITY (Millions of rugs) 80 S 90 100 (?)3. A fruit is traded in a competitive world market, and the world price is $10 per pound. The consumer quantity in this price is 100 million tonnes. One year later, overall fruit prices increase to $15 and total consumer level fall to 90 million tonnes. Under this circumstance, what is the price elasticity of demand fruit?Assume that the United States, as a steel-importing nation, is large enough so that changes in the quantity of its imports influence the world price of steel. The following table shows the U.S. supply and demand schedules for steel, along with the overall amount of steel supplied to U.S. consumers by domestic and foreign producers. Price (Dollars per ton) 100 200 300 400 PRICE (Dollars per ton) 800 700 600 500 400 300 200 100 500 600 700 0 0 2 Using the data in the table, use the blue points (circle symbol) to plot the demand curve and use the orange points (square symbol) to plot the supply curve (domestic plus imports) on the following graph. Then use the black cross to indicate the equilibrium price and quantity. ? 6 (Domestic) 0 0 1 2 3 5 Quantity Supplied The new equilibrium is (Domestic plus Imports) 0 8 10 12 14 16 18 20 QUANTITY (Tons of steel) With free trade, the equilibrium price of steel is $ 4 8 12 16 20 24 tons are supplied by U.S. producers, and tons are imported.…