In the figure to the right, the importing country imposes a tariff that raises the domestic price from $8 to $12 but lowers the foreign export price from $8 to $4. The net welfare gain from this tariff for the importing country is ○ A. $4. B. $18. C. $34. D. $16. - Price, P 24- 22- 20- 18- 16- 14- 12- 10 8- 6- 4- 2- 0 1 D 9 10 11 12 Quantity, Q
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- In the figure to the right, the importing country imposes a tariff that raises the domestic price from $8 to $12 but lowers the foreign export price from $8 to $4. The net welfare gain from this tariff for the importing country is OA. $18. OB. $4. OC. $34. O D. $16. 24- 22- 20- 18- 16- 14- 12- 10- 8- 6- 4- 2- 0- C Price, P 1 2 3 5 6 S d 8 D 9 10 11 12 Quantity, QIn the figure to the right, the importing country imposes a tariff that raises the domestic price from $16 to $24 but lowers the foreign export price from $16 to $8. The net welfare gain from this tariff for the importing country is A. $36. OB. $68. O C. $8. D. $32. 48- 44- 40- 36- 32- 28- 24- 20- 16- 12- 8- 4- 0- 0 Price, P 1 2 MA S D 9 Quantity, Q 10 11 12In the figure to the right, the importing country imposes a tariff that raises the domestic price from $8 to $12 but lowers the foreign export price from $8 to $4. As a result of this tariff, consumers in the importing country OA. experience a welfare loss valued at $34. O B. experience a welfare loss valued at $30. O C. experience a welfare loss valued at $12. OD. experience a welfare loss, but a monetary value is impossible to compute. 24- 22- 20- 18- 16- 14- 12- 10-.. 8- 6 4- Price, P 2- 6 S d\ 8 D Q 9 10 11 12 Quantity, Q
- Consider the domestic demand for rice to be given by Qd 25-0.5Pand that rice can be imported at an international price of $40 per sack. If the government perceives this price too high and decides to subsidize imports by $20 per sack. This policy will increase imports of rice by and create a deadweight loss of Select one: s units, $20. 20 units, $800 15 units, $50. 10 units, $100.16 of 38 Suppose that the domestic demand for sugar is given by P-27-2Qd and the domestic supply is given by P=2+3Qs. The world price is $11 and the government decided to impose an import tariff of $3 per unit. This decision of the government will reduce the quantity imported of sugar O A. from 10 units to 5 units. O B. from 5 units to 2.5 units. O C. from 41 units to 22 units. O D. from 15 units to 10 units. UnsureThe figure below shows the domestic demand (Dd) and domestic supply (Sd) curves of mopeds in a country before an import quota is imposed by the government. After the imposition of the quota, the maximum import quantity is QQ. $800 $750 $715 0 0.4 0.5 0.6 1.5 1.8 2.0 Olose $29.75 million. gain $21.5 million. Sa gain $31.5 million. lose $10 million. If the government auctions the quota licenses, the importing nation will Sa+QQ World price New export price with quot Da Quantity (Millions of Mopeds per year)
- 3. The world price of sugar is $.10 per lb., but import quotas raise the U.S. price to $.225 per lb. a. Compute the tariff equivalent of the quota (as a percent of the world price). b. Due to the high price of sugar in the U.S., high fructose corn sweetener emerges as an economic substitute for sugar. As a result it is expected that the demand for sugar will fall over time. From the perspective of the U.S. sugar industry, are they better off with tariff protection, or a quota which is equivalent today, but which stays fixed over time? Explain using a supply and demand diagram in your answer.Recently, US imposed new tariffs on Canadian softwood lumber. Lumber is intensively used in the construction and renovation projects for single-family homes. US Mkt. for lumber. Pw is the price of lumber available to domestic construction firms before the imposition of tariffs. On the graph, show (1) the price of lumber with tariff (PT); (2) quantity of lumber produced by domestic producers (Qsd); (3) quantity of lumber bought by domestic construction firms (Qdd); (4) quantity of lumber imported (IM); (5) revenue from tariff (TR); (6) Tariff deadweight loss (DWL). (5) With up/down arrows, indicate the change in the price of lumber available to domestic construction firms___, quantity of lumber available to domestic construction firms__ , quantity of lumber produced in the US__. In the market for lumber: 1. (10%) Label clearly the supply and demand curves, S and D, and . 2. (60%) On the graph, construct and label clearly (1) the price after the introduction of the tariff (PT) (2)…price supply domestic price- $35 import price + tarif $20 demand 100 300 500 650 850 quantity Based on the graph above, if there is a tariff of $15 per unit imposed on imports in this market: A. 750 units will be imported and tariff revenue to the government will be $11.250 B. 650 units will be imported and tariff revenue to the government will be $9,75O C. 350 units will be imported and tariff revenue to the government will be $5.250 D. 300 units will be imported and tariff revenue to the government will be $4,500
- in the attached diagram, given the domestic demand Dx and supply Sx curves, and assuming a fixed amount of import quota is imposed on imports, who will lose the rectangle area MJHN Price (S) 4.5 Sx (domestic) and who will gain the same rectangie area? Pt-Pw+t Pw Dx (domestic) Quantity (millions) 10 20 30 50 70 Oa. Domestic sumers will lose but domestic producers will capture it Ob. Domestic consumers will lose but foreign suppliers will capture it Oc Domestic consumers will lose but the tariff imposing govemment will capture it Od Domestic consumers will lose but no one in society will capture itConsider a small country that exports steel. Suppose that a "pro-trade" government decides to subsidize the export of steel by paying a certain amount for each ton sold abroad. 1. How does this export subsidy affect the 1. domestic price of steel, 2. the quantity of steel produced, 3. the quantity of steel consumed, and 4. the quantity of steel exported? 2. How does it affect 1. consumer surplus, 2. producer surplus, 3. government revenue, and 4. total surplus? 3. Is it a good policy from the standpoint of economic efficiency? (Hint: the analysis of an export subsidy is similar to the analysis of a tariff)57. Price, P 48- 44- 40- 36- 32- 28- 24- 20- 16- 12- 8- 4- 0- 9 10 11 12 Quantity, Q Refer to the above figure: the importing country imposes a tariff that raises the domestic price from $16 to $24. But lowers the export price from $16 to $8. What is the gain in producer surplus? O A. $8 о в. $24 O C. $36 O D. $32 77. Price, P 487 44- 40- 36- 32- 28- 24- 20- 16- 12- 8- 4- 0- 1 10 11 12 Quantity, Q 2 8. Refer to the above figure: The importing country imposes a tariff that raises the domestic price from $16 to $24. But lowers the export price from $16 to $8. As a result of the tariff government revenue is respectively. and the prodution distortion loss is O A. $16: $8 O B. $16: $4 OC. $32: $8 O D. $32: $4 30. CHAMPAGNE aLW= 5 hours per gallon a'Lw = 4 hours per gallon STRAWBERRIES НОМЕ FOREIGN aLc = 4 hours per pound a'lc = 2 hours per pound Which of the following statements are true? O A. Home has the absolute advantage in both strawberries and champagne and the comparative advantage…