Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 26, Problem 9RQ
To determine
The change in the price of domestic product with the international good.
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Price (dollars per shirt)
44
40
36
32
28
24
20
16
12
O
8
O 32 million
The figure shows the market for shirts in the United States, where D is the domestic demand curve
and S is the domestic supply curve. The world price is $20 per shirt. The United States imposes a
tariff on imported shirts, $4 per shirt.
24 million
S
In the figure above, with the tariff the United States imports
8 million
D
O 16 million
16 24 32 40 48 56 64
Quantity (millions of shirts per year)
million shirts per year.
American apparel makers complain to Congress about competition from China. Congress decides to impose either a tariff or a quota on apparel imports from China. Which policy would Chinese apparel manufacturers prefer? LO26.4 a. Tariff. b. Quota.
Figure: Trade 1
Price
$200
175
150
Domestic
Supply
500 7501,000:1,300
1,150
World Supply + Tariff
World Supply
Domestic
Demand
Quantity
If the world price for the good in this figure is higher than the domestic price, a move to free international trade means that
the domestic economy will become:
O either a net importer or a net exporter of the good, but it is impossible to say which.
O a net importer of the good.
neither a net importer nor a net exporter of the good.
a net exporter of the good.
Chapter 26 Solutions
Microeconomics
Ch. 26.2 - Prob. 1QQCh. 26.2 - Prob. 2QQCh. 26.2 - Prob. 3QQCh. 26.2 - Prob. 4QQCh. 26 - Prob. 1DQCh. 26 - Prob. 2DQCh. 26 - Prob. 3DQCh. 26 - Prob. 4DQCh. 26 - Prob. 5DQCh. 26 - Prob. 6DQ
Ch. 26 - Prob. 7DQCh. 26 - Prob. 8DQCh. 26 - Prob. 9DQCh. 26 - Prob. 10DQCh. 26 - Prob. 11DQCh. 26 - Prob. 12DQCh. 26 - Prob. 13DQCh. 26 - Prob. 14DQCh. 26 - Prob. 1RQCh. 26 - Prob. 2RQCh. 26 - Prob. 3RQCh. 26 - Prob. 4RQCh. 26 - Prob. 5RQCh. 26 - Prob. 6RQCh. 26 - Prob. 7RQCh. 26 - Prob. 8RQCh. 26 - Prob. 9RQCh. 26 - Prob. 10RQCh. 26 - Prob. 11RQCh. 26 - Prob. 12RQCh. 26 - Prob. 13RQCh. 26 - Prob. 1PCh. 26 - Prob. 2PCh. 26 - Prob. 3PCh. 26 - Prob. 4P
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- Assume that the comparative-cost ratios of two products—baby formula and tuna fish—are as follows in the nations of Canswicki and Tunata: Canswicki: 1 can baby formula ≡ 5 cans tuna fish Tunata: 1 can baby formula ≡ 7 cans tuna fish a. In what product should each nation specialize? Canswicki should produce _____- , and Tunata should produce _____ b. Would the following terms of trade be acceptable to both nations? i. 1 can baby formula ≡ 4 cans tuna fish: yes or no ii. 1 can baby formula ≡ 8 cans tuna fish: yes or no iii. 1 can baby formula ≡ 5.5 cans tuna fish: yes or noarrow_forward20. Assume that two countries (Home and Foreign) each produce two goods (wheat and rice) under constant cost production. Home produces 3 tons of rice or 1 ton of wheat with a day of labour. Foreign produces 2 tons of rice or 4 tons of wheat each day of labour. Without trade (in autarky), Home's daily production is 60 tons of rice and 20 tons of wheat. At which international price will Home's gains from trade be largest? A. 3 tons of rice per ton of wheat B. 2.5 tons of rice per ton of wheat C. 2 tons of rice per ton of wheat D. 1.5 ton of rice per ton of wheat E. 1 ton of rice per ton of wheatarrow_forwardWhich of the following statements about foreign trade is correct? Choose an answer: O 1. A good is imported if the world market price for this good is higher than the domestic opportunity costs of producing this good. O 2. A good is exported if the world market price for this good is lower than the domestic opportunity costs of producing this good. 3. The levying of a domestic duty rate on an imported good increases the producer surplus and reduces the domestic consumer surplus. O 4. If a country has an absolute advantage in one good, it also has a comparative advantage in that good. O 5. A particularly productive country can have a comparative advantage in all goods.arrow_forward
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