Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 9, Problem 8IAPA
To determine
The price of car and quantity produce by Mexico if import quota imposed is to be determined.
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The figure provided shows the Canadian domestic market for calculators.
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40
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world price with tariff
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If the world price is $5 and an import quota of 600 is imposed, the price after the quota, in numerals, is
Finland imports shoes into its country; they are a price taker in this market. Suppose the world price of shoes is $40. If Finland
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The quantity bought will increase and the price will be $30.
a
The quantity bought will fall and the price will be $30.
The quantity bought will fall and the price will be $50.
The quantity bought will increase and the price will be $50.
The following graph represents the domestic supply and demand for wheat in Turkey.
$100
55
50
40
75
150 180 240
340
450
Millions of tons
a. In the absence of trade, what is the equilibrium price and equilibrium quantity?
b. The government opens the wheat market to free trade and U.S enters the Turkish market,
pricing wheat at $40 per ton. What will happen to the domestic price of wheat? What will be
the new domestic quantity supplied and domestic quantity demanded? How much wheat will
be imported from U.S?
c. The government imposes a $10 per ton tariff on all imported wheat. What will happen to
the domestic price of wheat? What will be the new domestic quantity supplied and domestic
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Price per ton
Chapter 9 Solutions
Foundations of Economics (8th Edition)
Ch. 9 - Prob. 1SPPACh. 9 - Prob. 2SPPACh. 9 - Prob. 3SPPACh. 9 - Prob. 4SPPACh. 9 - Prob. 5SPPACh. 9 - Prob. 6SPPACh. 9 - Prob. 7SPPACh. 9 - Prob. 8SPPACh. 9 - Prob. 9SPPACh. 9 - Prob. 10SPPA
Ch. 9 - Prob. 11SPPACh. 9 - Prob. 1IAPACh. 9 - Prob. 2IAPACh. 9 - Prob. 3IAPACh. 9 - Prob. 4IAPACh. 9 - Prob. 5IAPACh. 9 - Prob. 6IAPACh. 9 - Prob. 7IAPACh. 9 - Prob. 8IAPACh. 9 - Prob. 9IAPACh. 9 - Prob. 1MCQCh. 9 - Prob. 2MCQCh. 9 - Prob. 3MCQCh. 9 - Prob. 4MCQCh. 9 - Prob. 5MCQCh. 9 - Prob. 6MCQCh. 9 - Prob. 7MCQ
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- 3. The world price of sugar is $.10 per lb., but import quotas raise the U.S. price to $.225 per lb. a. Compute the tariff equivalent of the quota (as a percent of the world price). b. Due to the high price of sugar in the U.S., high fructose corn sweetener emerges as an economic substitute for sugar. As a result it is expected that the demand for sugar will fall over time. From the perspective of the U.S. sugar industry, are they better off with tariff protection, or a quota which is equivalent today, but which stays fixed over time? Explain using a supply and demand diagram in your answer.arrow_forwardCountry X Price Odd Osd $ 5.00 200 400 4.00 250 350 3.00 300 300 2.00 350 250 1.00 400 200 The accompanying table gives data for Country X. Column 1 of the table is the price of a product. Column 2 is the quantity demanded domestically (Qdd, and Column 3 is the quantity supplied domestically (Qsd. If Country X opens itself up to international trade, how much will the country import if the world price is $2.00?arrow_forwardWhat would be the effects of imposing a quota on imported cars from Japan? Explain the effects for the American consumers and producers.arrow_forward
- Country Y LEGO Price Odd Osd $ 9.00 250 450 8.00 300 400 7.00 350 350 6.00 400 300 5.00 450 250 The accompanying table gives data for Country Y. Column 1 is the price of a product. Column 2 is the quantity demanded domestically (Qdd), and Column 3 is the quantity supplied domestically (Qsd. If the world price of the product is $5.00, then Country Y willarrow_forwardCountry Y Price Qdd Osd $ 9.00 250 450 8.00 300 400 7.00 350 350 6.00 400 300 5.00 450 250 The accompanying table gives data for Country Y. Column 1 is the price of a product. Column 2 is the quantity demanded domestically (Qdd). and Column 3 is the quantity supplied domestically (Qsd). If the world price of the product is $9.00, then Country Y willarrow_forwardThe following graph represents Canada's domestic supply and demand for coffee.Assume that Brazil is the only country producing and selling coffee in the world market. B) The government opens the market to free trade, and Brazil enters the market, pricingcoffee at $1 per pound. i. What will happen to the domestic price of coffee?ii. What will be the new domestic quantity supplied and domestic quantity demanded?iii. How much coffee will be imported from Brazil?arrow_forward
- a. In the absence of trade, what is the equilibrium price and equilibrium quantity? b. The government opens the wheat market to free trade and U.S enters the Turkish market, pricing wheat at $40 per ton. What will happen to the domestic price of wheat? What will be the new domestic quantity supplied and domestic quantity demanded? How much wheat will be imported from U.S? c. The government imposes a $10 per ton tariff on all imported wheat. What will happen to the domestic price of wheat? What will be the new domestic quantity supplied and domestic quantity demanded? How much wheat will now be imported from U.S? d. How much revenue will the Turkish government receive from the $10 per ton tariff?arrow_forwardWhat would likely be the effect of a country significantly lowering tariffs on agricultural imports? A. Domestic agricultural prices increase and local production decreases. B. Domestic agricultural prices decrease and local production increases. C. Domestic agricultural prices decrease and local production decreases. D. Domestic agricultural prices and local production remain unchanged.arrow_forward2 Using the graph, assume that the government imposes a $1 tariff on solar panels. Answer the following questions given this information. Price $13 65 8 Domestic Supply $1.00 Tariff World Price Domestic Demand о 30 40 60 84 96 Quantity a. What is the domestic price and quantity demanded of solar panels after the tariff is imposed? b. What is the quantity of solar panels imported before the tariff? c. What is the quantity of solar panels imported after the tariff? d. What would be the amount of consumer surplus before the tariff? e. What would be the amount of consumer surplus after the tariff? f. What would be the amount of producer surplus before the tariff? g. What would be the amount of producer surplus after the tariff? h. What would be the amount of government revenue because of the tariff? i. What would be the total amount of deadweight loss due to the tariff?arrow_forward
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