The following table shows the product market in a small country. Quantity Demanded Domestically Quantity Supplied Domestically 0 110 30 100 90 90 80 70 60 120 150 180 If the world price of the product is $80 and a tariff of $10 per unit is applied to imports of the product, then the tariff would generate government revenues Multiple Choice $400 $800. $700 Price $120 110 100 90 80 70 $10

The following table shows the product market in a small country. Quantity Demanded Domestically Quantity Supplied Domestically 0 110 30 100 90 90 80 70 60 120 150 180 If the world price of the product is $80 and a tariff of $10 per unit is applied to imports of the product, then the tariff would generate government revenues Multiple Choice $400 $800. $700 Price $120 110 100 90 80 70 $10

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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SCENARIO A: Estonia, a net importer of sugar, imposes a tariff on sugar. The following table provides the hypothetical information to Estonia's imports, consumption, and production of sugar following the tariff introduction. Without Tariff (free With Tariff trade) World price $12 $12 ($/pound) Domestic price $12 $15 ($/pound) Domestic Consumption 1500 1000 (million pounds/year) Domestic Production 100 300 (million pounds/year) Calculate the net welfare effect of the tariff introduction. Is Estonia better off or worse off?
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Consider the market for coffee in the small, isolated country of Krakozhia. Within Krakozhia, the domestic demand for coffee is: Q = 500-2p and the domestic supply of coffee is: Q* = -150+ 3p
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The following graph shows the domestic supply of and demand for maize in Burundi. The world price (Pw) of maize is $270 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. 450 Domestic Demand Domestic Supply 430 410 390 370 350 330 310 290 P 270 250 40 80 120 180 200 240 280 320 360 400 QUANTITY (Tons of maize) If Burundi is open to international trade in maize without any restrictions, it will import tons of maize. Suppose the Burundian government wants to reduce imports to exactly 160 tons of maize to help domestic producers. A tariff of per ton will achieve this. A tariff set at this level would raise $ in revenue for the…
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The following graph shows the same domestic demand and supply curves for soybeans in Venezuela. Suppose that the Venezuelan government changes its international trade policy to allow the free trade of soybeans. The horizontal black line (PW) represents the world price of soybeans at $350 per ton. Assume that Venezuela's entry into the world market for soybeans has no effect on the world price and there are no transportation or transaction costs associated with international trade in soybeans. Also assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Use the green point (triangle symbol) to shade consumer surplus, and then use the purple point (diamond symbol) to shade producer surplus. When Venezuela allows free trade of soybeans, the price of a ton soybeans in Venezuela will be $350. At this price, tons of soybean will be demanded in Venezuela, and tons will be supplied by domestic suppliers. Therefore,…