PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 16.A, Problem 1P
(a)
To determine
Identify the
(b)
To determine
Effects of world price in quantity demanded, supplied, exports, and imports.
(c)
To determine
Effects of import tariffs in quantity demanded, supplied, exports, and imports.
(d)
To determine
Effect of import quotas in a government revenue.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
18. What quantity will Country A supply to the rest of the world at P=$17?
19. What quantity will Country A supply to the rest of the world at P=$13?
20. What quantity will Country A demand from the rest of the world at P=$7?
21. What quantity will Country B demand from the rest of the world at P=$15?
Explain briefly but clearly if the following statement is true, false or uncertain: The common equilibrium relative price of the two goods after trade can not lie outside the range bonded by the autarky (before trade) price ratios in the two countries.
Q65
If Canada can produce both cannabis and soybeans more efficiently, that is, with smaller absolute amounts of resources, than Brazil, then:
Multiple Choice
Brazil should impose tariffs.
then there is no possible basis for mutually advantageous specialization and trade between Canada and Brazil.
we can conclude that Canada is an industrially advanced economy and Brazil is a developing economy.
it will necessarily be advantageous for Brazil to import both cannabis and soybeans from Canada.
mutually advantageous specialization and trade between Canada and Brazil may still be possible.
Chapter 16 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
Knowledge Booster
Similar questions
- Let us consider the case of Good X in Malaysia. The demand and supply functions for Good X in Malaysia are Demand function: QD=363−2P Supply function: QS=22+P If the world price is 70, then is Malaysia an importer or exporter? Find out the quantity of imports at Pw=70 If import quota was 80 units what will be the new price in the Malaysian market? How many Good X will be produced domestically after quota has been implemented? How many Good X will be consumed by domestic consumers after quota has been implemented? What will be the import after implementing import quota of 80 units? (Please give your answers in two decimal places) What is the percentage change in imports after the imposition of import quota? Please give your answers in two decimal places, Multiply by 100 to convert into percenatge (if you get 0.40 then submit 40 in the answer)arrow_forwardFor a small country called Boxland, the equation of the domestic demand curve for cardboard is QD = 210 − 2P, where QD represents the domestic quantity of cardboard demanded, in tons, and P represents the price of a ton of cardboard. For Boxland, the equation of the domestic supply curve for cardboard is QS = –90 + 3P, where QS represents the domestic quantity of cardboard supplied, in tons, and P again represents the price of a ton of cardboard. . If Boxland prohibits international trade in cardboard, then the equilibrium price of a ton of cardboard isarrow_forwardConsider a small country. The domestic (home) demand is Qd = 120−3P and supply is Qs = 2P −20 whereQs and Qd are the quantity supplied and demanded, respectively, and P is the price per unit.A) Find the equilibrium price and quantity when the domestic market is closed to international trade.Now, suppose the country opens up to international trade, and the world price is $20 per unit.B) Find the new equilibrium price, domestic quantity supplied and demanded, and quantity imported.C) Suppose the domestic government imposes a tariff of $4 per unit. Find the equilibrium price, domesticquantity supplied and demanded, quantity imported, and tax revenue collected.D) Now, suppose the government impose a quota that limits the quantity of imports to 20 units. Find thenew equilibrium price, domestic quantity supplied and demanded, and quantity imported.E) Calculate Consumer surplus, producer surplus, and total surplus, with free tradeF) Calculate Consumer surplus, producer surplus, tax revenue,…arrow_forward
- Suppose you are hired as a consultant by the government to determine the impact of trade policies. The government is suggesting a 10% nominal tariff on imported cars in order to limit competition against domestically assembled cars that incorporates only about 20 percent of domestic inputs in its total inputs. Discuss nominal tariffs and effective tariff rates. How much is the effective tariff rate? Why is the effective tariff rate different than the nominal tariff rate? Suppose the currency depreciation would lead to a higher price in the free market. However, the government wants to maintain the same amount of final price after tariffs. Determine the impact on the nominal tariff rate.arrow_forwardIn a world where transporting goods and services across borders is costless, it becomes much easier for firms to access foreign markets. This would eliminate a major barrier that many companies face when considering international expansion. Firms can now export their products to foreign markets without worrying about expensive shipping costs, making it financially viable to target new customers in different countries. The absence of trade barriers, such as tariffs, quotas, and regulatory restrictions, further enhances the feasibility of international expansion. Trade barriers typically increase the cost of doing business across borders and can limit market access. With no such barriers, firms can freely engage in cross-border trade, increasing their market reach and diversifying their customer base. In a world with significant variations in factor conditions, such as labor, capital, natural resources, technology and infrastructure, firms can benefit from international expansion by…arrow_forwardAssume that the weekly domestic demand for petroleum is represented by the equation: P= -2.25Q + 600. And, the weekly domestic supply of petroleum is represented by the equation: P= 1.5Q + 25. Assume also, that the world price of petroleum is $200. What is the domestic autarky price and quantity when this economy is closed to trade? What would be the total quantity of petroleum demanded when the economy is open to international trade? What would be the volume of imports when the economy is open to trade? What is the import dependency ratio in this economy when it is open for international trade in petroleum?arrow_forward
- Nigeria and Singapore both produce paper and pens. It takes Nigeria four labor hours to produce a box of paper and half hour to produce a pen. In Singapore, production of each takes three labor hours. Assume both countries have 12 labor hours for simplicity. _________has absolute advantage in the production of paper. ________ has comparative advantage in the production of paper. Hence, ______ should export pens. To benefit both countries, the price of a pen should be between __ and __ boxes of paper. Fill in the blanks.arrow_forwardConsider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of meekers is $25. Suppose that the world price of meekers is $23. Assume that Meekertown is too small to influence the world price of meekers once it enters the international market. If Meekertown allows free trade, then it will ______ (export/import) meekers. Given current economic conditions in Meekertown, complete the following table by indicating whether each of the statements is true or false. Statement True False Meekertownian consumers are better off under free trade than they were before. Meekertownian producers were better off without free trade than they are with it. True or False: When a country is too small to affect the world price, allowing free trade will sometimes decrease total surplus in that country, regardless of whether it imports or exports as a result of international trade.…arrow_forwardQ58 Suppose Spain is currently producing 90 units of wine and 10 units of cheese, but to produce 10 more units of cheese it must sacrifice 30 units of wine. Further, suppose that Portugal produces 45 units of wine and 45 units of cheese, but to produce 10 more units of cheese it must sacrifice only 10 units of wine. It can be concluded that... a. More information is needed to conclude anything about comparative advantage in either country. b. Portugal has an absolute advantage in wine production and Spain has an absolute advantage in cheese production. c. Spain has a comparative advantage in the production of wine and Portugal has a comparative advantage in the production of cheese. d. Spain has an absolute advantage in both wine and cheese production. e. Portugal has an absolute advantage in both wine and cheese production.arrow_forward
- Scenario 9-1 For a small country called Boxland, the equation of the domestic demand curve for cardboard is QD = 380 − 2P, where QD represents the domestic quantity of cardboard demanded, in tons, and P represents the price of a ton of cardboard. For Boxland, the equation of the domestic supply curve for cardboard is QS = –60 + 3P, where QS represents the domestic quantity of cardboard supplied, in tons, and P again represents the price of a ton of cardboard. Refer to Scenario 9-1. Suppose the world price of cardboard is $139 and international trade is allowed. Then Boxland’s consumers demand Group of answer choices 204 tons of cardboard and Boxland’s producers supply 357 tons of cardboard. 204 tons of cardboard and Boxland’s producers supply 204 tons of cardboard. 102 tons of cardboard and Boxland’s producers supply 204 tons of cardboard. 102 tons of cardboard and Boxland’s producers supply 357 tons of cardboard.arrow_forwardIf the USA could produce 1 ton of potatoes or 0.5 tons of wheat per worker per year, while Ireland could produce 3 tons of potatoes or 2 tons of wheat per worker per year, there can be mutual gains from trade if: Question 23 options: The USA specializes in potatoes because of its comparative advantage in producing potatoes. The USA specializes in wheat because of its absolute advantage in producing wheat. The USA specializes in wheat because of its comparative advantage in producing wheat. There can be no mutual gains from trade.arrow_forwardConsider a small country that exports steel. Suppose the following graph depicts the domestic demand and supply for steel in this country. One of the two price lines represents the world price of steel. Because this country exports steel, the world price is represented by(p1 or p2) . Suppose that a “pro-trade” government decides to subsidize the export of steel by paying $10 for each ton sold abroad. With this export subsidy, the price paid by domestic consumers is $______ per ton, and the price received by domestic producers is$_______per ton. The quantity of steel consumed by domestic consumers (reamins unchanged, decrease, and increase) , the quantity of steel produced by domestic producers (reamins unchanged, decrease, and increase) , and the quantity of steel exported (reamins unchanged, decrease, and increase) . True or False: With the export subsidy, this country will start importing steel from abroad. Under the export subsidy, consumer surplus is…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education