Connect Access Card for Managerial Econnomics
9th Edition
ISBN: 9781259354335
Author: Michael Baye, Jeff Prince
Publisher: McGraw-Hill Education
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Chapter 9, Problem 14PAA
To determine
To explain: Whether the given situation is the best decision as per one's first instinct.
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Question 12
One of Morocco's top import goods is wheat. Domestic market demand is described as Qn = 69 – 3P, and domestic
producers supply wheat according to the function Qs = (5/6)P, where Q is measured in millions of bushels. The
perfectly competitive world price of wheat is $6 per bushel.
million bushels of wheat are imported under the competitive world price.
Suppose the Moroccan government introduces an import quota equal to 23 million bushels of wheat. The new
price is $_
per bushel of wheat.
million. You must draw and label a graph that
As a result of this import quota, domestic producers gain $.
enables the TA to follow all of your intermediate steps.
Suppose the Moroccan government wanted to achieve the same outcome (reduce imports to 23 million bushels of
wheat) with a tariff instead. Relative to the import quota equilibrium, a tariff would cause market efficiency to
_million. You must add on to your existing graph to help
(increase/decrease/be the same) by $_
the TA to…
Domestic producers of microprocessors send a lobbyist to the U.S. government to request that the government impose trade restrictions on imports of microprocessors. The lobbyist claims that the U.S. microprocessor industry is new and cannot currently compete with foreign firms. However, if trade restrictions were temporarily imposed on microprocessors, the domestic microprocessor industry could mature and adjust and would eventually be able to compete in the world market.
Which of the following justifications is the lobbyist using to support their argument in favor of the trade restriction on microprocessors?
National-security argument
Infant-industry argument
Unfair-competition argument
Jobs argument
Using-protection-as-a-bargaining-chip argument
One 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 revenue
Chapter 9 Solutions
Connect Access Card for Managerial Econnomics
Ch. 9 - Prob. 1CACQCh. 9 - Prob. 2CACQCh. 9 - Prob. 3CACQCh. 9 - Prob. 4CACQCh. 9 - Prob. 5CACQCh. 9 - Prob. 6CACQCh. 9 - Prob. 7CACQCh. 9 - Prob. 8CACQCh. 9 - Prob. 9CACQCh. 9 - Prob. 10CACQ
Ch. 9 - Prob. 11PAACh. 9 - Prob. 12PAACh. 9 - Prob. 13PAACh. 9 - Prob. 14PAACh. 9 - The opening statement on the website of the...Ch. 9 - Prob. 16PAACh. 9 - Prob. 17PAACh. 9 - Prob. 18PAACh. 9 - Prob. 19PAACh. 9 - Prob. 20PAACh. 9 - Prob. 21PAACh. 9 - Prob. 22PAACh. 9 - Prob. 23PAACh. 9 - Prob. 24PAA
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