c.) If the world price level of a product was below the domestic U.S. equilibrium price, diagram if the U.S. would import or export the product? Identify how the consumer surplus and producer surplus in the U.S. would be impacted before and after the trade. Price A Supply P U.S. E Н I P World G Dm K Qi QE Q2 Quantity Consumer Surplus before trade = Producer Surplus before trade = Consumer Surplus after trade = Producer Surplus after trade = く6/ 7

c.) If the world price level of a product was below the domestic U.S. equilibrium price, diagram if the U.S. would import or export the product? Identify how the consumer surplus and producer surplus in the U.S. would be impacted before and after the trade. Price A Supply P U.S. E Н I P World G Dm K Qi QE Q2 Quantity Consumer Surplus before trade = Producer Surplus before trade = Consumer Surplus after trade = Producer Surplus after trade = く6/ 7

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 3QR

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Similar questions

Why might Belgium, France, Italy, and Sweden have a higher export to GDP ratio than the United States?
Explain how a subsidy on agricultural goods like sugar adversely affects the income of foreign producers of imported sugar.
How does protectionism affect the price of the protected good in the domestic market?
What factors does Paul Krugman identity that supported expanding international trade in the 1800s?
Trade has income distribution effects. For example, suppose that because of a government-negotiated reduction in trade barriers, trade between Germany and the Czech Republic increases. Germany sells house paint to the Czech Republic. The Czech Republic sells alarm clocks to Germany. Would you expect this pattern of trade to increase or decrease jobs and wages in the paint industry in Germany? The alarm clock industry in Germany? The paint industry in Czech Republic? The alarm clock industry in Czech Republic? What has to happen for there to be no increase in total unemployment in both countries?
a) What is a tariff ? Does a tariff have a result from an import quota? b) Suppose a tariff allowed an industry to create 200,000 jobs paying an average of $22,500 per year. Before the tariff consumers bought 3 billion units (60% imported) at a price of $30. After the tariff they bought 2.75 billion units (none imported) at a price of $36. How much did total consumer spending on the good increase and how much per new job? c) True or False and explain: Free trade allows countries to specialize in producing those goods in which they have the comparative advantage, which in turn, results in increased world production and income.
9. Answer ALL parts of this question. Consider the standard trade model with two goods and two factors, labour and capital. (a) Suppose that a country experiences an increase in its labour force. Assume thatgood X is labour intensive and good Y is capital intensive. How would theproduction possibility frontier change as a result? Illustrate this with a simplediagram. (b) What does it mean for the “terms of trade” to improve and why might this matter interms of welfare? (c) Consider two countries: Home and Foreign. Each country produces two goods,cloth (C) and food (F). Assume Home is an exporter of cloth. Now suppose Homeimposes a 20 percent tariff on the value of food imports. What will be the effect ofthe food tariff on the relative price of cloth and terms of trade? Illustrate youranswer with a relevant diagram. You may assume that Home is large enough toaffect the world market.
Consider a small country that exports steel. Supposethat a “pro-trade” government decides to subsidizethe export of steel by paying a certain amount foreach ton sold abroad. How does this export subsidyaffect the domestic price of steel, the quantity ofsteel produced, the quantity of steel consumed, andthe quantity of steel exported? How does it affectconsumer surplus, producer surplus, governmentrevenue, and total surplus? Is it a good policy fromthe standpoint of economic efficiency? (Hint: Theanalysis of an export subsidy is similar to the analysisof a tariff.)
give explanations too thank you In the absence of a well-developed local capital market borrowers might go to which World Bank organization to find investment funds? What is ______________ Rather than exporting or FDI I can negotiate a contract that gives another company the right to make my product in their country by what? What is ______________ what is a situation in which higher tariff is triggered after imports reach a certain threshold? What is ______________ When an immigrant sends money to his or her family back in their home country. (it's difficult to measure) What is ______________ When more expensive goods sourced from inside a customs union replace the consumption of less expensive goods from outside the customs union. What is ______________
1. Now home opens up to trade. How does home's export supply curve change, if at all, after the population growth has occurred, compared to its export supply with only 25 workers? Draw the export supply curve for home for 25 workers and for 35 workers 2. What will happen to the equilibrium relative price of w heat under free trade? Show using a suitable diagram. Hint: Think about what happens to the foreign import demand curve when only home's population grows but foreign's population stays constant