PRICE (Dol 5.00 4.00 3.00 2.00 1.00 0 0 SWorld 1500 3000 4500 6000 7500 9000 10500 12000 13500 15000 WHEAT (Bushels) Fill in the following table by entering the quantities for production, consumption, and imports of wheat in the EU before and after the $2.00 levy. Production (Bushels) Consumption (Bushels) Imports (Bushels) Before the levy After the levy Suppose that the world price of wheat falls to $1.00 per bushel, but the EU keeps the same support price for the farmers. On the previous graph, use the grey line (star symbol) to draw the new world supply curve (SWorld,Now Given the change in the world price, the variable levy adjusts to $ per bushel of wheat in order to maintain the support price. Which of the following describe the effects of the variable levy on international trade? Check all that apply. Foreign producers are discouraged from reducing prices to maintain export sales. Foreign producers have an incentive to cut prices to maintain export sales. 41

PRICE (Dollars per tonne) 1160 Domestic Demand 1110 1060 1010 960 910 860 810 760 710 660 0 20 40 60 80 100 120 140 160 180 QUANTITY (Tonnes of oranges) and is represented by the horizontal black line. satisfy domestic demand as much as possible before any exporting or importing takes place. price of oranges and that there are no transportation or transaction costs associated Domestic Supply A tariff set at this level would raise $ PW 200 If Zambia is open to international trade in oranges without any restrictions, it will import Suppose the Zambian government wants to reduce imports to exactly 40 tonnes of oranges to help domestic producers. A tariff of $ tonnes of oranges. in revenue for the Zambian government. per tonne will achieve this. Q Search this course

Price (dollars per ton) 1,000 800 600 400 200 0 1 2 3 4 5 D 6 Steel (millions of tons per year) The figure shows the market for steel in the United States. If the world price for a ton of steel is $200 per ton, how much steel does the United States import? Suppose the United States imposes a tariff of $400 per ton of steel. With this tariff, how much steel does the United States import? If it is possible to calculate the amount of the deadweight loss from the $400 per ton tariff, what is the amount? If it is not possible, explain why it is not possible to calculate it. Next suppose the United States imposes a tariff of only $200 per ton of steel. With this tariff, how much steel does the United States import? How much revenue does the government collect from this tariff? Finally, suppose that instead of a tariff the United States imposes a quota of 2 million tons of steel per year. Illustrate how the market changes with this quota. With the quota, what is the price of steel in the…

1._______ The total value of a nation’s exports minus thetotal value of its imports over some period of time