Macroeconomics (7th Edition)
Macroeconomics (7th Edition)
7th Edition
ISBN: 9780134738314
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 3, Problem 3.4.9PA

Subpart (a):

To determine

The effect of the market of banana and apple in US.

Subpart (b):

To determine

The effect of the market of banana and apple in US.

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The graph to the right shows the supply and demand for Japanese-made automobiles in the United States. Assume that Japanese-made and U.S.-made automobiles are of the same quality and are considered to be perfect substitutes. Suppose that the U.S. government imposes a tariff on Japanese-made automobiles. 1.) Using the line drawing tool, show the effect on the market for Japanese-made automobiles. Properly label your line. 2.) Using the point drawing tool, identify the new equilibrium price and quantity. Label it 'E₂'. Carefully follow the instructions above, and only draw the required objects. As a result of the tariff, the price of Japanese-made cars rises and the quantity falls. In the market for American-made cars, there will be and thus the price of American-made cars will equilibrium quantity will and the Price per Automobile ($) S Japanese-made Automobiles (thousands)
The graph shows the car market in Mexico when Mexico places no restriction on the quantity of cars imported. The world price of a car is​ $10,000.   Suppose the government of Mexico introduces an import quota on imported cars of 4 million a year.   Draw a line that shows the effect of the import quota on supply. Label it S​ + quota. Label it.   Draw a point to show the quantity of cars bought in Mexico and the price paid.     When the government of Mexico introduces an import quota of 4 million​ cars, Mexico imports nothing million cars and produces nothing million cars.
Recently, China placed tariffs on the importation of US soybeans. Assume that the domestic market for soybeans in China is described by the following equations: Demand: P = 11.5 – Q          Supply: P = 5.5 + Q Price is in 10 Yuan (¥) per bushel of soybeans and the units for Quantity are 100 million bushels per year. This is to make graphing simpler. This does NOT mean that the price is 10 and quantity is 100. Rather it means that if the price was 40¥ and the quantity was 7,500,000,000 bushels, this would plot as 4 and 7.5 respectively. The world price for soybeans is ¥65/bushel (this would graph as 6.5). Graph the soybean market in China showing equilibrium both with no barriers to trade and with a ¥15/bushel tariff. Be sure to fully and clearly label the graph including: Domestic Demand curve (D), Domestic Supply curve (S), the World Price (WP), and the Price with tariffs (PT).
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