Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 9, Problem 9.5.9PA
To determine
Impact of trade restrictions.
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Assignment Print View
5.
The graph below shows a small country that produces wine, with no international trade, existing in a
state of autarky.
Market for Wine
80
Tools
75
S
70
--
65
Pworld
Qd
60
55
--O
50
45
Qs
40
35
30
25
20
15
10
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Quantity (millions of barrels)
a. What is the initial market price and quantity of wine traded in equilibrium?
Pe: $|
per barrel
Qe:
million barrels
Now suppose this small country opens its market to international trade. Suppose the world price of
wine is $60 per barrel.
https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=5.&postSubmissionView=13252717296651441&wid=13252718466068729&rol...
1/2
Price (dollars per barrel)
The graph shows the domestic demand and domestic supply
for soybeans. Assume this country is open to international
100
trade, that soybeans are a perfectly competitive good, and that
90
the world price of soybeans is $30.
Domestic supply
80-
Suppose a tariff of $10 is imposed. What price will result in
this country?
70.
60 -
50
40 -
World price
30 -
20 -
Domestic demand
After the tariff is imposed, how many units of soybeans will
10 -
be imported?
0 10 20
30
40
50
60
70
80
90
100
Quantity
Units
%24
Price ($)
2. Assume that Sweden and Norway currently producing and
consuming soybeans and coffee. The following table 1
shows the prices of soybeans and coffee for both nations.
Table 1: Prices of soybean and coffee
Price (per carton)
Soybeans (S)
Coffee ($)
Sweden
Norway
64
85
71
82
Based on relative price of coffee, can Norway gain by
exporting soybeans? If no, what commodity Norway
should export? Briefly explain this scenario by using an
appropriate diagram.
Chapter 9 Solutions
Microeconomics (7th Edition)
Ch. 9 - Prob. 9.1.1RQCh. 9 - Prob. 9.1.2RQCh. 9 - Prob. 9.1.3PACh. 9 - Prob. 9.1.4PACh. 9 - Prob. 9.1.5PACh. 9 - Prob. 9.2.1RQCh. 9 - Prob. 9.2.2RQCh. 9 - Prob. 9.2.3PACh. 9 - Prob. 9.2.4PACh. 9 - Prob. 9.2.5PA
Ch. 9 - Prob. 9.2.6PACh. 9 - Prob. 9.2.7PACh. 9 - Prob. 9.2.8PACh. 9 - Prob. 9.2.9PACh. 9 - Prob. 9.3.1RQCh. 9 - Prob. 9.3.2RQCh. 9 - Prob. 9.3.3RQCh. 9 - Prob. 9.3.4RQCh. 9 - Prob. 9.3.5PACh. 9 - Prob. 9.3.6PACh. 9 - Prob. 9.3.7PACh. 9 - Prob. 9.3.8PACh. 9 - Prob. 9.3.9PACh. 9 - Prob. 9.3.10PACh. 9 - Prob. 9.3.11PACh. 9 - Prob. 9.3.12PACh. 9 - Prob. 9.3.13PACh. 9 - Prob. 9.3.14PACh. 9 - Prob. 9.4.1RQCh. 9 - Prob. 9.4.2RQCh. 9 - Prob. 9.4.3PACh. 9 - Prob. 9.4.4PACh. 9 - Prob. 9.4.5PACh. 9 - Prob. 9.4.6PACh. 9 - Prob. 9.4.7PACh. 9 - Prob. 9.4.8PACh. 9 - Prob. 9.4.9PACh. 9 - Prob. 9.4.10PACh. 9 - Prob. 9.4.11PACh. 9 - Prob. 9.4.12PACh. 9 - Prob. 9.4.13PACh. 9 - Prob. 9.4.14PACh. 9 - Prob. 9.5.1RQCh. 9 - Prob. 9.5.2RQCh. 9 - Prob. 9.5.3RQCh. 9 - Prob. 9.5.4PACh. 9 - Prob. 9.5.5PACh. 9 - Prob. 9.5.6PACh. 9 - Prob. 9.5.7PACh. 9 - Prob. 9.5.8PACh. 9 - Prob. 9.5.9PACh. 9 - Prob. 9.5.10PACh. 9 - Prob. 9.1CTECh. 9 - Prob. 9.2CTECh. 9 - Prob. 9.3CTE
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