Microeconomics
13th Edition
ISBN: 9781337617406
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 20, Problem 2WNG
(a)
To determine
The level of imports at ‘Pw’.
(b)
To determine
The level of import at ‘Pw+T’.
(c)
To determine
The loss in
(d)
To determine
The gain in
(e)
To determine
The revenue received as a result of tariff.
(f)
To determine
The net loss to society as a result of tariff.
(g)
To determine
The net benefit to society moving from tariff to non-tariff.
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Students have asked these similar questions
In the accompanying figure,
PW is the world price and PW + T is the world price plus a tariff. Identify the following:a. The level of imports at PWb. The level of imports at PW + Tc. The loss in consumers’ surplus as a result of a tariff d. The gain in producers’ surplus as a result of a tariffe. The tariff revenue received by the government as a result of a tariff f. The net loss to society as a result of a tariffg. The net benefit to society of moving from a tariff to no tariff
An important difference between tariffs
and quotas is that tariffs
Select one:
a. help domestic producers
b. stimulate international trade
c. None of the above
d. generate tax revenue for the government
e. raise the price of the good
pnal Economi
2. In the accompanying figure, P is the world price and
Pw + T is the world price plus a tariff. Identify the
following:
W
W
a. The level of imports at P
b. The level of imports at Pw+ T
W
W
c. The loss in consumers' surplus as a result of a tariff
d. The gain in producers' surplus as a result of a tariff
e. The revenue received as a result of a tariff
f. The net loss to society as a result of a tariff
g. The net benefit to society of moving from a tariff to no
tariff
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Similar questions
- If Indonesia (which is a small country) imposes an import tariff on textile imports, we can conclude that:(a) The world price of textile rises, and Indonesia imports less.(b) The world price of textile stays constant, and Indonesia imports less.(c) The world price of textile falls, and Indonesia imports less.(d) The world price of textile stays constant, and Indonesia imports the same as before. Explain why.arrow_forwardWhich scenario describes the operation of a tariff? Angola opens up trade with the world corn market and decides to maintain its previous market price. Consumers in Turkey, who pay $4 per cup of tea, demand that the government open up trade with the world market because they know the world price is $2 per cup. Ireland taxes the import of potatoes in order to keep domestic farmers in business. Norway becomes an exporter of fireworks after it opens up trade with the world market and realizes its market price is lower than the world price. Which is NOT an effect of a tariff? deadweight loss a domestic market price above world market price Activate Windows Go to Settings ho activate Win increased demand decreased importsarrow_forwardWhich of the following is NOT a reason why countries impose tariffs on imports? A. Protect domestic industries B. Retaliation C. National security D. None of the abovearrow_forward
- PW is the world price and PW + T is the world price plus a tariff. Identify the following: g. The net benefit to society of moving from a tariff to no tariffarrow_forwardWhich of the following is NOT a law that impacted U.S. tariffs? A. Food, Drug, and Cosmetic Act B. Smoot-Hawley Act C. McKinley Act D. Fordney-McCumber Actarrow_forwardUS imports of sugar are subject to a quota. Although rounded up, the figures used in this exercise are close to reality. Thanks to the quota, US production of sugar is 6 million ton/year, instead of 5 million without the quota, and US consumption of sugar is 8 million ton/year, instead of 9 million without the quota. The US consumer pays $480/ton, whereas the world price is $280/ton. a) Easy: What is the volume of the quota? b) Easy: Why is the US price higher with the quota? c) Medium: Can you plot US supply and demand curves? Show graphically the impact of the quota for consumers and producers.arrow_forward
- Explain the effects of tariff on the current account of an importing country.arrow_forwardWrite a brief explanation of each of the following terms: a. specific tariff b. intra-industry trade C. nominal tariff rate <arrow_forwardThe graph to the right shows the supply and demand for beef in the United States, under the assumption that the United States can import as much as it wants at the world price of beef without causing the world price of beef to increase. a. How much beef does the United States import at the world price(WP)? 500 million pounds of beef (enter a whole number). b. Now suppose that the United States imposes a tariff on beef of $0.50 a pound. How much beef is now imported? million pounds of beef (enter a whole number). Price ($ per lb.) $2.50 $2.00 700 900 11001200 Q (millions of lbs.) Sus WP + tariff WP Dusarrow_forward
- Using a domestic-market demand- and supply-curve graph, a. show the impact of tariff on a small country's import price, domestic demand, domestic supply, import quantity, consumer surplus, producer surplus, government revenue, and total welfare; b. Is the country unambiguously worse off as a result of the tariff? c. In the same graph, show how to achieve the same import quantity with an import quota; d. When would the tariff and the import quota lead to the same amount of welfare change? e. How would the answers to (a) and (b) change for a large country?arrow_forwardExplain why high tariffs have a negative impact on a country's economy.arrow_forward
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