International Economics
16th Edition
ISBN: 9781305887633
Author: Robert Carbaugh
Publisher: Cengage Learning
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Question
Chapter 4, Problem 3SQ
To determine
Explain under what condition does a nominal tariff applied to an import product overstates or understates the actual or effective protection afforded by the nominal tariff.
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Define tariff .
What is the effect of placing tariffs on products imported into the U.S. from other countries? Are there any problems with this?
Why would an importing country use a tariff rather than a quota?
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- An import Tariff does: Increase domestic consumption Decrease domestic production Decrease domestic prices Increase government revenuearrow_forwardWhat are the benefits and costs of import tariffs?arrow_forwardEvaluate the effects of an import tariff by the government of a small country. Explain in detail the effects of an import tariff on the economic welfare of the small country. Describe the potential advantages to the economy if the government offers an export subsidy.arrow_forward
- Carefully explain how the imposition of a tariff is different for a large country (that can affect the world price) than a small country. Show your work graphically and explain in words.arrow_forwardWhich of the following is not included in the objectives of tariffs? To promote indigenous research and development To protect domestic industries from foreign competition None of the above To guard against dumpingarrow_forwardOne advantage of a tariff over a quota, from the perspective of the nation imposing it, is that a tariff decreases the domestic price increases the quantity of imports decreases the quality of imports raises tax revenuearrow_forward
- What impact would a tariff on Chinese goods have on the consumer? How about producersarrow_forwardForeign's demand curve for wheat is p*=8-1/20q*d. Its supply curve is p*=2+1/20q*s Determine the effect of the tariff onarrow_forwardDetermine the effect of the tariff on Home import-competing producers APS = Home consumers ACS = Home government tariff revenue AGR = Adding these effects together AW = APS + ACS + AGR = Homes demand curve for wheat P=10-1/20QD Homes Supply curve P=4+1/20QS Foreign demand curve for wheat P=8-1/20QD Foreign supply curve P=2+1/20QS Tariff On Wheat is T=1arrow_forward
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