2.80- 2.60 a 2.40- Supply 2.20 G 으 200 billion Consider the market for ethanol in the United States depicted in the figure to the right. Assume the world price of ethanol is $0.60 per gallon, and at that once the United States can buy as much ethanol as it wants without causing the world price to rise Now suppose a quota eliminating trade is imposed by the government. What is the dollar amount of the change in consumer surplus as a result of the quota? S (Enter a numeric response using a real number rounded to two decimal places using the correct sign) 1.80 1.60 21.40 1.20 1.00 0.80 P 0.60- 0.40- 020 0.00- 1 2 3 4 5 6 Demand Quantity of ethanol (billion gallons per year)

2.80- 2.60 a 2.40- Supply 2.20 G 으 200 billion Consider the market for ethanol in the United States depicted in the figure to the right. Assume the world price of ethanol is $0.60 per gallon, and at that once the United States can buy as much ethanol as it wants without causing the world price to rise Now suppose a quota eliminating trade is imposed by the government. What is the dollar amount of the change in consumer surplus as a result of the quota? S (Enter a numeric response using a real number rounded to two decimal places using the correct sign) 1.80 1.60 21.40 1.20 1.00 0.80 P 0.60- 0.40- 020 0.00- 1 2 3 4 5 6 Demand Quantity of ethanol (billion gallons per year)

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 9PA

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No International Trade A producer willing to supply a set of contact lenses for $40 will therefore receive producer surplus of ($120 - $40 = $80) when they sell their product for $120. While we could figure this out for all producers and add up the results, there's an easier way using the graph. Vivan Graphically, producer surplus is the area from the market price ($120) down to the supply curve and over to the equilibrium quantity of 120. 0. o Quantity Supplied Quantity Demanded Vivan Domestic Market Price Quantity Supplied Quantity Demanded Got it! So what is total producer surplus in the contact lens market? 240 20 220 lio 40 40 200 60 60 180 80 80 160 100 100 140 120 120 120 Enter a response then click Submit below 140 140 100 160 160 80 Subrmit 180 180 60 MacBook Air
Brazil is one of the world’s largest exporters of beef and China is a major purchaser of that beef (an estimated 30% of China’s beef imports in 2016 came from Brazil). However, in March 2017, China, South Korea, the European Union, and Chile suspended imports of meat products from Brazil as a precautionary measure in response toallegations that meat inspectors and politicians had received bribes to overlook improper meat packing practices and allow sales of tainted food. How would the closing of export markets for a country’s beef products together with a fall in domestic sales of beef products and an increase in the domestic equilibrium quantity be reflected in supply-anddemand diagrams of that country’s foreign and domestic markets for beef in the short run?
Suppose that the world price of oil is $70 per barrel and that the United States can buy all the oil it wants at this price. Suppose also that the demand and supply schedules for oil in the United Sta follows: Price ($ per Barrel) 55 60 65 70 75 U.S. Quantity Demanded 26 24 22 20 18 U.S. Quantity Supplied 14 16 18 20 22 Now suppose that the United States allows no oil imports. The equilibrium price in the United states is $ 70 per barrel and the equilibrium quantity is 20 million barrels. If the United States imposed a price ceiling of $65 per barrel on the oil market and prohibited imports, there would be an of million barrels of oil. excess supply excess demand
Home's import demand curve (shown on the graph to the right) for wheat is QMD 80-40P. Foreign's demand curve is Foreign's supply curve is D=80-20P. S-40+20P. 1) Using the line drawing tool, accurately graph Foreign's export supply curve. Label the curve 'EX 2) Using the point drawing tool, assuming free trade between the countries at zero transportation cost, indicate on the graph the world price of wheat and the volume of trade. Label the point Ea Carefully follow the instructions above and only draw the required objects. What would the price of wheat be in the absence of trade? $(Round your answer to the nearest penny) 3- 04 0 Price, P EX 120 MD 10 20 30 40 50 60 70 80 90 100 Quantity, Q 3
Please solve 4th,5th,6th Suppose the world price for a good is 100 and the domestic demand-and supply curves are given by the following equations Demand: P=160-Q Supply: P= 10 + 15Q How much is consumed? How much is produced at home? What are the values of consumer and producer surplus? If a tariff of 10 percent is imposed, by how much do consumption and dopest production change? What is the change in consumer and producer surplus? How much revenue does the government earn from tariff?
Assume that the domestic supply and demand for a good are given by the following equations. Q = 500 – 20 P Q = 80 + 10 P If the world price is $10 what is the free trade level of imports? Calculate the net welfare effects of a quota of 60 units. (Quota rent goes to foreign suppliers ( VERS) . Use also graph to show the effects of this quota. If %30 tariff imposed on the world price(10$) , what will be net welfare effects? Compare this welfare effect with the one in (a) and comment. Use a new graph to show the effects. Suppose the domestic industry is a Monopoly, with which commercial policy instrument ( quota or tariff? - assuming both of them yields the same level of imports- ) would it prefer to be protected and why? Explain.
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Now suppose other countries produce cassava and Côte d'Ivoire can import cassava at the world price (Pw) which is lower than the autarky (e. economic independence or self-sufficiency) price (Pa). Figure 2 below depicts the demand and supply curves for cassava in Côte d'Ivoire with imports. Quantity is represented on horizontal axis and price is on the vertical axis. Carefully examine Figure 2 and answer questions 8-11 that follow: Note: Qa is the Autarky quantity, Qs is the quantity of cassava supplied by producers in Côte d'Ivoire, and Qd is the quantity of cassava demanded by consumers in Côte d'Ivoire after import Figure 2: Demand and Supply of Cassava in Côte d'Ivoire with Imports Price ($) Pa Oa 9b OC Od OF or Pw 0 a Qs U d la la D₂ Quantity (kg) Question 8: Using the letters (i.e. a, b, c, d, e, f) from Figure 2, which area represents the producer surplus if Côte d'ivoire imports cassava at the world price (Pw)? Select all that apply.
17. Export quota. The U.S. is a net exporter of soy to the rest of the world, in part because most Americans do not particularly like soy products like soy milk. Many people feel this is unfortunate as a diet with more soy milk and less cow milk would probably improve our health. Perhaps some trade policies could encourage people to eat more soy. Suppose the domestic (American) soy market is described by: Qр 3D 600- 25P Qs = 37.5P – 150 (The quantities are in tons and prices in $/ton.) There is a large world market with Pw = 16. For the purposes of this question assume the U.S. is a small country within this large, global soy market, even though that is not exactly true. How much soy does the U.S. export? tons 18. (continued) Now suppose an export quota is imposed that limits exports to 125 tons. The point of this policy would be to limit the amount of wholesome soy leaving the country and effectively force Americans to use it. Let's figure out what it does in our trade model. What…
Chapter 10: In the small open economy of Gatorland, the domestic demand for widgets is given by P=100-3Q; the home supply of widget is given by P = Q. The world price is $40. Now let the government of Gatorland give a $15 per unit subsidy on each widget exported. What is the value of total subsidy payments to Gatorland's widget exporters? O $825 O $600 O $125 O $225
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per ton) 1255 1200 1145 €1090 1035 980 925 870 815 760 705 0 I Supply Demand A tariff set at this level would raise $ P. W 40 80 120 180 200 240 280 320 380 400 QUANTITY (Thousands of tons of oranges) Graph Input Tool Market for Oranges in Jordan Price (Dollars per ton) Domestic Demand (Thousands of tons of oranges) If Jordan is open to international trade of oranges without any restrictions, it will import full value for your answer, accounting for the horizontal axis units.) 1,090 in revenue for the Jordanian government. 120 Domestic Supply (Thousands of tons of oranges) Suppose the Jordanian government wants to reduce imports to exactly 80,000 tons of oranges to help domestic producers. A tariff of S will…
2. Suppose cheap mountain bikes are made in both the US and the Philippines. The supply and demand for each market are given by: US Qd = 9110 – P Qs = 100P – 2000 Philippines Qа 3D 100— 0.5P Q 3 Р- 20 Find the autarky equilibrium price and quantity sold in each country. b. Now suppose the two countries engage in international trade with each other. Find the combined supply and demand equations. Now find the trade price and quantity (world total quantity and imports/exports). Comment on the trade price and the relative size of the two markets. d. а. с. In general, which country will gain relatively more by engaging in international trade. Explain briefly.