ENGR.ECONOMIC ANALYSIS
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Publisher: Oxford University Press
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CENGAGE MINDTAP
Homework (Ch 09)
4. Effects of a tariff on international trade
PRICE (Dollars per ton)
525
495
465
The following graph shows the domestic supply of and demand for maize in Sudan. The world price (Pw) of maize is $255 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 maize
and that there are no transportation or transaction costs associated with international trade in maize. Also, assume that domestic suppliers will satisfy
domestic demand as much as possible before any exporting or importing takes place.
435
405
375
345
315
285
Homework (Ch 09)
255
225
0 10
20
Domestic Demand
Domestic Supply
x
40
50 60 70
QUANTITY (Tons of maize)
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cody ✓ Engl 1010 Wyo
bSearch results for 'The following graph s...
30
ng.cengage.com
80
+I
90
Pw
100
C MindTap - Cengage Learning
?
+ 0
= Orange: Micro & Macro. Chapter 9 【App...
Q Search this course
X
A-Z
bongo
A+
O
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CENGAGE MINDTAP
Homework (Ch 09)
PRICE (Dollars per ton)
495
465
435
405
375
345
315
285
255
225
HO
Homework (Ch 09)
0 10
+
20
40 50 60 70
QUANTITY (Tons of maize)
30
music ✓
cody ✓ Engl 1010 Wyo
bSearch results for 'The following graph s...
A tariff set at this level would raise $
80
90
ng.cengage.com
P.
W
100
If Sudan is open to international trade in maize without any restrictions, it will import
C MindTap - Cengage Learning
Suppose the Sudanese government wants to reduce imports to exactly 20 tons of maize to help domestic producers. A tariff of $
achieve this.
in revenue for the Sudanese government.
tons of maize.
Grade It Now
per ton will
Save & Continue
Continue without saving
+ 0
= Orange: Micro & Macro. Chapter 9 【App...
Q Search this course
X
A-Z
bongo
A+
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- 22. < Previou Suppose there are three countries in the world: Volcania, Portlandia, and Minitown. These three countries produce a total of 3 different kinds of goods: Raspberries, Pomegranates, and Guavas. If Volcania imposes a tariff on Raspberries from Portlandia, and Minitown. OThe price of Raspberries in Volcania will increase for everyone OThe Raspberries industry in Minitown will benefit OThe Raspberries in Portlandia will be the only one to see higher prices for this productarrow_forward5. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for maize in Bangladesh. Bangladesh is open to international trade of maize without any restrictions. The world price (Pw) of maize is $260 per ton and is represented by the horizontal black line. Throughout this problem, assume that the amount demanded by any one country does not affect the world price of maize and that there are no transportation or transaction costs associated with international trade in maize. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 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) 500 470 440 410 380 350 320 290 260 230 200 0 + Supply…arrow_forwardNonearrow_forward
- Suppose that the world price of baseball caps is €1 and there are no import restrictions on this product. Assume that Spanish consumers are indifferent between domestic and imported baseball caps. a. What quantity of baseball caps will domestic suppliers supply to domestic consumers ?__________thousandsarrow_forward3. Welfare effects of a tariff in a small country Suppose Bangladesh is open to free trade in the world market for maize. Because of Bangladesh's small size, the demand for and supply of maize in Bangladesh do not affect the world price. The following graph shows the domestic maize market in Bangladesh. The world price of maize is Pw = $350 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). 710 Domestic Demand Domestic Supply 670 Cs 630 590 550 PS 510 470 430 390 350 310 15 30 45 60 75 90 105 120 135 150 QUANTITY (Tons of maize) If Bangladesh allows international trade in the market for maize, it will import |tons of maize. Now suppose the Bangladeshi government decides to impose a tariff of $40 on each imported ton of maize. After the tariff, the price…arrow_forwardFigure 9-2 Price (dollars per pound) $1.00 0.60 0 G C ان H A D 1 9 15 9 million pounds of rice. O 15 million pounds of rice. B 31 million pounds of rice. E 42 million pounds of rice. J US Supply 31 F K 42 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the impact of this tariff. Pw World price (Pw) Refer to Figure 9-2. Without the tariff in place, the United States produces + tariff US Demand Quantity of rice (millions of pounds)arrow_forward
- 2. Welfare effects of a tariff in a small country Suppose Guatemala is open to free trade in the world market for oranges. Since Guatemala is small relative to the international market, the demand for and supply of oranges in Guatemala have no impact on the world price. The following graph shows the domestic market for oranges in Guatemala. The world price of a ton of oranges is Pw = $350. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). PRICE (Dollars per ton) 710 Domestic Demand Domestic Supply 670 630 590 550 510 470 430 28 8 8 8 8 8 8 8 390 350 P. 310 0 15 30 45 60 75 90 105 120 135 150 QUANTITY (Tons of oranges) CS PS Because Guatemala participates in international trade in the market for oranges, it will import tons of oranges. Now suppose the Guatemalan…arrow_forward3. Welfare effects of a tariff in a small country Suppose Ronduras is open to free trade in the world market for soybeans. Because of Honduras's small size, the demand for and supply of soybeans in Honduras do not affect the world price. The following graph shows the domestic soybeans market in Honduras. The world price of soybeans is Pw = $400 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). 1200 Domestic Demand Domestic Supply 1100 CS 1000 900 PS 800 700 600 500 400 300 200 100 120 140 160 180 200 20 40 60 80 QUANTITY (Tons of soybeans) PRICE (Dollars pe: ton)arrow_forward1. What do the welfare effects of an import quota differ from those of import tariff?arrow_forward
- 4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for wheat in New Zealand. The world price (Pw) of wheat is $255 per bushel 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 wheat and that there are no transportation or transaction costs associated with international trade in wheat. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. PRICE (Dollars per bushel) 480 Domestic Demand 455 430 405 380 355 330 305 280 255 230 0 " 30 Domestic Supply 60 90 120 150 180 210 QUANTITY (Bushels of wheat) ++ PW 240 270 300 ?arrow_forward6. The arguments for restricting trade Suppose there is a policy proposal to increase trade restrictions on imported microprocessors to the United States. Read the following scenario and answer the question that follows. The president of the United States argues that the United States should threaten to impose a tariff on Chinese microprocessors in order to induce the Chinese to remove its tariff on American cars. Which of the following justifications is the president using to support their argument in favor of the trade restriction on microprocessors? Unfair-competition argument Infant-industry argument Jobs argument Using-protection-as-a-bargaining-chip argument National-security argumentarrow_forwardQUESTION 4 In the graph below, the quantity of imports before and after imposing a $2 tariff would be Domestic Supply $10 $8 $6 0 0 0 0 с 50, 40 50, 20 40, 30 30, 10 30, 20 DEFO 20 30 & 9 World P Domestic D Q (millions of towels) QUESTION 5 If Mexico subsidizes its textiles, making it impossible for U.S. producers to compete, the appropriate response is for the U.S. to enact an equal subsidy so that there is a level playing field of competition in text U.S. economic well-being would be maximized by purchasing subsidized textiles from Mexico. a tariff on textiles would improve economic well-being in the U.S. None of the above is a true statement. the appropriate response is to threaten to retaliate with an equal subsidy and enact it if the Mexicans do not reduce their subarrow_forward
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