Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 7, Problem 22APA
To determine
How tariff on textiles changes the price that the US buyers pay for textiles, quantity imported and the quantity produced in US.
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Georgia and Moldova are famous for their quality of wine and the United Kingdom decides to
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Price per bottle
£10
£7
Moldovan price
£5
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Quantity
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The year is 2005. For many years the US has restricted textile imports from China using quotas. Now under WTO the US is having to eliminate the quotas and allow china to export textiles to the US free of quotas. Use the principles of demand and supply to analyze the effect of this action on: the US textile industry, the US textile consumers, the textile industry of Vietnam (another textile producing country) that has been exporting textile to the US without quotas. Remember to tell us: who gains, and who loses in each case.
4. Effects of a tariff on international trade
The following graph shows the domestic demand for and supply of lemons in Sudan. The world
price (Pw) of lemons is $265 per ton and is displayed as a horizontal black line. Throughout the
question, assume that all countries under consideration are small, that is, the amount demanded
by any one country does not affect the world price of lemons and that there are no transportation
or transaction costs associated with international trade in lemons. Also, assume that domestic
suppliers will satisfy domestic demand as much as possible before any exporting or importing
takes place.
PRICE (Dollars per ton)
535 Domestic Demand.
505
475
445
415
385
355
325
295
265
235
0
Domestic Supply
P
I
50 100 150 200 250 300 350 400 450 500
QUANTITY (Tons of lemons)
?
If Sudan is open to international trade in lemons without any restrictions, it will
import
tons of lemons.
A tariff set at this level would raise $
Suppose the Sudanese government wants to reduce…
Chapter 7 Solutions
Macroeconomics
Ch. 7.1 - Prob. 1RQCh. 7.1 - Prob. 2RQCh. 7.2 - Prob. 1RQCh. 7.2 - Prob. 2RQCh. 7.2 - Prob. 3RQCh. 7.3 - Prob. 1RQCh. 7.3 - Prob. 2RQCh. 7.3 - Prob. 3RQCh. 7.3 - Prob. 4RQCh. 7.3 - Prob. 5RQ
Ch. 7.4 - Prob. 1RQCh. 7.4 - Prob. 2RQCh. 7.4 - Prob. 3RQCh. 7.4 - Prob. 4RQCh. 7.4 - Prob. 5RQCh. 7 - Prob. 1SPACh. 7 - Prob. 2SPACh. 7 - Prob. 3SPACh. 7 - Prob. 4SPACh. 7 - Prob. 5SPACh. 7 - Prob. 6SPACh. 7 - Prob. 7SPACh. 7 - Prob. 8SPACh. 7 - Prob. 9SPACh. 7 - Prob. 10SPACh. 7 - Prob. 11SPACh. 7 - Prob. 12APACh. 7 - Prob. 13APACh. 7 - Prob. 14APACh. 7 - Prob. 15APACh. 7 - Prob. 16APACh. 7 - Prob. 17APACh. 7 - Prob. 18APACh. 7 - Prob. 19APACh. 7 - Prob. 20APACh. 7 - Prob. 21APACh. 7 - Prob. 22APACh. 7 - Prob. 23APACh. 7 - Prob. 24APACh. 7 - Prob. 25APACh. 7 - Prob. 26APACh. 7 - Prob. 27APACh. 7 - Prob. 28APA
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