5 3 2 A B D F G I 8 11 S 7) Use the graph above to answer this question. Initially, Spartania is an autarchy and there is no international trade allowed. Then, the country decides to allow free trade. The world price is $2. Which of the following areas best represents the additional economic surplus created when free trade is permitted? A) G+H B) I C) C+E D) A+B+C E) D+F+E+G+H
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- If an economy is open to foreign trade of good X, imposing a tariff will reduce total surplus (total surplus being defined as consumer + producer surplus). Which of the following ideas best describes why we observe tariffs being use in practice? a. The government can be under political pressure to implement inefficient economic policy. b. The tariff revenue raised will outweigh efficiency losses. c. Economic analysis does not fully explain efficiency losses. d. Economic stability is not often a political incentive.If economy is open to foreign trade of good X, imposing a tariff will reduce total surplus (total surplus being defined as consumer + producer surplus). Which of the following ideas best describes why we observe tariffs being use in practice? Basically, what is the effect of tarrifs? a. The government can be under political pressure to implement inefficient economic policy. b. The tariff revenue raised will outweigh efficiency losses. c. Economic analysis does not fully explain efficiency losses. d. Economic stability is not often a political incentive.In the past, Canada has agreed to set an upper limit on the total amount of softwood lumber exported to the United States. This is an example of a(n): Group of answer choices export subsidy voluntary export restriction import quota protective tariff
- Suppose the nation of Isoland is an importer of textiles and is looking for a way to raise government revenue. The following graph shows the effect of a tariff on textile imports.The analysis of a quota implies that .... please select one or more : a) The effect of a quota on trade is the same as a tariff. b) A quota will cause the same deadweight losses as a tariff. c) States should prefer quota instead of tariff. d) A quota increases imports if it is associated with high price elasticity of demand. e) When a quota is applied, the consumer surplus decreases but the producer surplus does not increase because only the state benefits from the quota.Suppose there was previously an import tariff imposed on imported shoes, but the government decides to eliminate the tariff. We can assume that consumer surplus will _____ and producer surplus will _____ as a result of eliminating the tariff. increase or decrease?
- In 1980, in response to the Soviet invasion of Afghanistan, President Jimmy Carter imposed a grain embargo prohibiting the sale of American grain to the Soviet Union. The Soviets adapted and got grain from elsewhere. The Chinese, in response to Trump’s tariffs, stopped buying U.S. soybeans, getting them instead from Brazil. There is little evidence that such embargoes put any real economic pressure on their targets. When a government embargoes the products of another country what other, potentially unintended and/or negative consequences could you imagine from that act? (100 words maximum)The following goods and services are commonly traded in Australia. For each good or service explain whether the trade in that particular commodidity is explained by external or internal economies of scale: 1: A musician on a busy street in Sydney 2: All cars are either imported or assembled in Australia 3: Gold mine in South AustraliaIn a Mixed Specific Factors model with two sectors, Cars (C) and Wheat (W), Capital (K) is specific to C and Land (A) is specific to W. If the government imposes a tariff on the imports of W then Both owners of K and owners of A will benefit. Owners of A will benefit. Owners of K will benefit. Neither owners of K nor owners of A will benefit. Include diagram*** and explanation attached is graph for reference
- Steel Industry Consider a small country that exports steel. Suppose the following graph depicts the domestic demand and supply for steel in this country. One of the two price lines represents the world price of steel. Use the following graph to help you answer the questions below. You will not be graded on any changes made to this graph. 1. Because this country exports steel, the world price is represented by P1 or P2. Suppose that a “pro-trade” government decides to subsidize the export of steel by paying $10 for each ton sold abroad. 2. With this export subsidy, the price paid by domestic consumers is $???? per ton, and the price received by domestic producers is $???? per ton. 3. The quantity of steel consumed by domestic consumers INCREASES or REMAINS UNCHANGED or DECREASES, the quantity of steel produced by domestic producers INCREASES or REMAINS UNCHANGED or DECREASES, and the quantity of steel exported INCREASES or REMAINS UNCHANGED or DECREASES. 4. TRUE or FALSE:…Which of the following statements is false? A. A quota is a tax levied against a specific good being imported into a country B. A tariff is a tax levied on imported goods C. A quota is a limit on the quantity of a good being imported into a country D. A tariff reduces the amount of imported goodsIn the Pure Specific Factors model with two sectors, Cars (C) and Wheat (W), Capital (K) is specific to C and Land (A) is specific to W. If the government imposes a tariff on the imports of W then Both owners of K and owners of A will benefit. Owners of A will benefit. Owners of K will benefit. Neither owners of K nor owners of A will benefit. Include diagram*** and explanation attached is graph for reference