The demand curve for wine in Italy is given by D = 20 2P. Its supply curve is given by S = 2P – 4. Italy is a small country. The price of wine in the world market is $3. Suppose that the Italian government's objective is to protect the domestic wine industry. It imposes a specific tariff of $2 on wine imports. The optimal tariff (i.e., the tariff that maximizes Italy's welfare) on wine for Italy is: 0 1 2 3 none of these

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The market for pencils has a domestic demand equation P=20−0.5Q�=20−0.5�, and a domestic supply equation  P=5+Q�=5+�, where quantity is measured in thousands. The world supply equation for pencils is PW=10��=10.  The domestic government decides to implement a tariff of $10 per thousand pencils. As a result of the tariff, the new domestic price of pencils is

Brazil is an importer of computer chips. When the Brazilian government imposes an import quota on computer chips, consumer surplus decreases, total surplus increases in the Brazilian computer chip market. consumer surplus increases, total surplus decreases in the Brazilian computer chip market. consumer surplus decreases, total surplus decreases in the Brazilian computer chip market. consumer surplus increases, total surplus increases in the Brazilian computer chip market. O O O

Consider a large country with a domestic demand characterized by the inverse demand function P=1000-Q. Domestic supply is represented by the equation P=400+Q. Finally, the world price of the good is 900. You know that an export tariff pass-through is 10%, meaning that foreign price decreases by 10% value of an export tariff t; more generally, 10% of any change in the domestic price is absorbed by the world market. a) Draw a diagram of a free trade case, label imports, consumer and producer surplus. b) Now you want to introduce export quota restrictions g. Calculate the value of the optimal export quota q, which maximizes domestic welfare. Illustrate CS, PS, QR, and DWL on your graph. Calculate their numerical values.

Home's demand curve for wheat is P = 10 - (1/20)Qd. Its supply curve is P = 4+ (1/20)Qs Foreign's demand curve for wheat is P * = 8 - (1/20) Qd* Its supply curve is P* = 2+(1/20)Qs* Determine the effect of the tariff on Home import-competing producers APS = Home consumers ACS = Home government tariff revenue AGR= Adding these effects together AWAPS + ACS + AGR =

Consider a small country with the following inverse demand and supply functions of tomatoes: P = 80 – 2Q, P = 20 + 2Q. The world price of tomatoes is 80. This country's government decided to support domestic tomato producers and introduced a production subsidy of 20. Deadweight loss of this country, associated with this production subsidy is then equal to

A federal regulation that required that all beef consumed in the US must be grown and processed in the US is likely to: Drive up the price of beef in the US Increase beef consumption in the US Decrease consumption of chicken in the US (assuming chicken is a substitute for beef in the US) Increase international trade in beef products

The government of canada recently signed a new preferential trade agreement and has agreed to pay subsidies to poultry farmers to compensate for increased competition they may face from imports. You are employed as an analyst. In order to determine the dollar value of compensation you are required to estimate how the Canadian price of poultry and the quantity of imported poultry will change as a result of this new trade agreement. Canada is a small importing country in the world market for poultry. Provided is the following information about the Canadian poultry market: 1.The world price of poultry is $5 2.The Canadian poultry market is currently (before new trade agreement) protected by a tariff rate quota (TRQ) of the following format: -an in-quota tariff is $1/unit -the import quota volume is 100 units -the over-quota tariff is $10/unit 3.An excess demand (ED) for imports function for poultry has been estimated as P = 28 - 0.14Q   a)Draw the diagram for imports in this market, and…

Consider the Colombian market for soybeans. The following graph shows the domestic demand and domestic supply curves for soybeans in Colombia. Suppose Colombia's government currently does not allow international trade in soybeans. Use the black point (plus symbol) to indicate the equilibrium price of a ton of soybeans and the equilibrium quantity of soybeans in Colombia in the absence of international trade. Then, use the green triangle (triangle symbol) to shade the area representing consumer surplus in equilibrium. Finally, use the purple triangle (diamond symbol) to shade the area representing producer surplus in equilibrium.   Based on the previous graph, total surplus in the absence of international trade is   .   The following graph shows the same domestic demand and supply curves for soybeans in Colombia. Suppose that the Colombian government changes its international trade policy to allow free trade in soybeans. The horizontal black line (PWPW) represents the world…