In the figure to the right, the importing country imposes a tariff that raises the domestic price from $4 to $6 but lowers the foreign export price from $4 to $2. As a result of this tariff, producers in the importing country A. experience a welfare gain valued at $17. B. experience a welfare gain valued at $9. C. experience a welfare gain valued at $6. D. experience a welfare gain valued at $8. 0 Price, P 12- 11- S 10- 9- 8- 7- 6- 5 4- 3- 2- 1- 0- 0 1 2 3 8 9 10 11 12 Quantity, Q

In the figure to the right, the importing country imposes a tariff that raises the domestic price from $4 to $6 but lowers the foreign export price from $4 to $2. As a result of this tariff, producers in the importing country A. experience a welfare gain valued at $17. B. experience a welfare gain valued at $9. C. experience a welfare gain valued at $6. D. experience a welfare gain valued at $8. 0 Price, P 12- 11- S 10- 9- 8- 7- 6- 5 4- 3- 2- 1- 0- 0 1 2 3 8 9 10 11 12 Quantity, Q

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 7PA

See similar textbooks

Similar questions

raded Assignment | Read Chapter 5 Back to Assignment Attempts: ܀ Average: 14 2. Comparing tariff, quota, and subsidy Aa Aa Which of the following statements regarding the effects of a tariff, quota, and subsidy are correct? Check all that apply. A subsidy involves smaller sacrifices in national welfare than occur under an equivalent tariff or quota. The direct cost of the subsidy is borne by foreign producers. A subsidy yields the same result for domestic producers as does an equivalent tariff or quota, but at a higher Copyright Notices cost. Tariffs and quotas distort choices for domestic consumers and cause less efficient home production. Terms of Use Due Tuesday 11.03.15 at 11:00 PM Privacy Notice Grade it Now Security Notice Save & Continge Accessibility
If a large country imposes a subsidy O the world price falls foreign importers gain O all available choices O foreign exporters lose
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. 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
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 $5,000 per rug in each country. 10000 ( ) 8000 8000 7000 8000 5000 4000 3000 2000 1000 0 0 Pu 10 Do 20 D₁ XX ✩ XX 30 40 50 60 70 QUANTITY (Millions of rugs) 80 S 90 100 (?)
Consider the figure to the right, which shows the domestic market for a good. Suppose that a tariff is added in that market. Using the line drawing tool, show the effect of this on the domestic market. Label your line either 'D,' or 'S₁. Carefully follow the instructions above and only draw the required object. When a tariff is added, it benefits domestic because it product due to the price of a close producers consumers foreign firms. demand for the domestic Price ($) $20- $10 $16- $14 $12 $10 10 16- 14 $2 12 14 Quantity go Do 16 18 20 Q Q G
3. State the effect of an export subsidy on the following: a. Price of the good in the exporting country. b. Price of the good in the importing country. C. Consumer surplus in the exporting country. d. Consumer surplus in the importing country. e. National welfare in the exporting country. f. National welfare in the importing country.
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.
Submi Question 15 of 20 > The effects of a tariff are O identical to the effects of a quota, except that the price of the good is higher. O reduced quantity supplied overall, reduced quantity supplied by domestic producers, and a lower price. O reduced quantity supplied overall, decreased quantity supplied by domestic producers, and a lower price. O reduced quantity supplied overall, increased quantity supplied by domestic producers, and a higher price. Activate Windows Hi LAPTOP LOGIN
Import demand is given by A by the difference between the demand for a good and the supply of a good in the world market. B the import quota C the difference between the domestic demand for a good and the domestic supply for a good. D the difference between the domestic supply for good and the domestic demand for a good
1 of What is the effect of a tariff on the market price? Select one: a. It keeps the price of the exported good the same as the world price. b. It raises the price of the imported good above the world price. c. It lowers the price of the exported good below the world price. d. It lowers the price of the imported good below the world price.
The 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)
Suppose a home country is large. If the large nation places a tariff on imports, an increase in domestic welfare occurs if the terms-of-trade effect is greater than the A. revenue effect plus consumption effect. B. deadweight loss. C. protective effect plus revenue effect. D. consumption effect plus redistribution effect