Microeconomics (13th Edition)
13th Edition
ISBN: 9780134744476
Author: Michael Parkin
Publisher: PEARSON
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Question
Chapter 7.3, Problem 2RQ
To determine
What are the effects of a tariff on the domestic production, quantity brought, and the price.
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What would be the effects of imposing a quota on imported cars from Japan? Explain the effects for the American consumers and producers.
Analyze the impact of a decrease in tariffs (taxes) on imported flat screen televisions in the market for flat screen televisions.
The figure below shows the U.S. market for imported wine. For simplicity, we
consider export supply curves to be flat. Chilean wine is available for $480 per
barrel and French wine is available for $420 per barrel.
Price per barrel
$500
$480
$420
10
a.
$480
b. $560
C.
$500
d. $420
15
a
Chilean price
French price
US demand for imported wine
Quantity
(millions of barrels per year)
Suppose the United States has a tariff of $80 per barrel on imported wine.
Then, the United States joins a free-trade area with Chile. At what price per
barrel will the imported wines be purchased by the U.S. consumers?
Chapter 7 Solutions
Microeconomics (13th Edition)
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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- Why does the efficiency of an import tariff depend on the price elasticity of demand?arrow_forwardGeorgia and Moldova are famous for their quality of wine and the United Kingdom decides to start importing from them. There is an 5£ tariff on imported wine. Considering the graph below, where does the UK buy its wine from and how much does it cost on the domestic market? Price per bottle £10 £7 Moldovan price £5 Georgian price UK demand for imported wine Quantity (millions of bottles per year) 10 15 22 Suppose the UK joins a trade bloc with Moldova and maintains its 5£ tariff on wine from outside the bloc. a) What will the new domestic price be? b) How much do consumers gain/lose? c) How about the government? d) Is there trade creation or trade dıversion or both? e) How much does the UK gain/lose?arrow_forwardVietnam has a policy of free trade in motorcycles which are sold in world markets at a price of 10,000 per motorcycle. Under free trade, Vietnam produces 100,000 motorcycles and imports 100,000 motorcycles. To provide some protection to the domestic industry, Vietnam imposes an import tariff of $1500 per motorcycle. With this tariff in place, production in Vietnam rises by 5,000 motorcycles and consumption drops by the same amount. Calculate the effects of the tariff on: a. Consumer Surplus b. Producer Surplus c. Government Revenues d. Overall Welfare e. If the tariff imposed by the Vietnamese had led to small reduction in world prices of, say, 250 dollars, how, qualitatively, would the welfare calculations (a), (b), (c) and (d) above change?arrow_forward
- what is tariff and how does it effect the economyarrow_forwardSuppose a per-unit tariff of $10 is imposed on imported cell phones. After the tariff: - The quantity demanded is 10 million - The quantity supplied domestically is 2 million Calculate the amount of tax revenue collected due to the tariff.arrow_forwardDefine tariff .arrow_forward
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