Demand 10 40 80 100 Widgets Q2) The graph above shows the domestic supply and demand for sugar in Egypt. a. If Egypt is a small importer what would be the value of a prohibitive tariff? b. Conduct a welfare analysis of tariff shown in the above graph. c. Explain using a model the welfare implications if Egypt is major importer of sugar. Under what conditions would the overall welfare improve? Calculations are not required.

Demand 10 40 80 100 Widgets Q2) The graph above shows the domestic supply and demand for sugar in Egypt. a. If Egypt is a small importer what would be the value of a prohibitive tariff? b. Conduct a welfare analysis of tariff shown in the above graph. c. Explain using a model the welfare implications if Egypt is major importer of sugar. Under what conditions would the overall welfare improve? Calculations are not required.

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

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?
Explain how a subsidy on agricultural goods like sugar adversely affects the income of foreign producers of imported sugar.
How would direct subsidies to key industries be preferable to tariffs or quotas?
Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The demand (d) and supply (s) for cameras In Thailand and Japan is described by the following functions: QsT=-5+14P QsJ=-10+14P QdT=60-P QdJ=80-P P is the price measured in a common currency used in both countries, such as the Thai Baht. Compute the equilibrium price (P) and quantities in each country without trade. Now assume that free trade occurs. The free-trade price goes to 56.36 Baht. Who exports and Imports cameras and in what quantities?
The country of Pepperland exports steel to the Land of Submarines. Information for the quantity demanded (Qd) and quantity supplied (Qs) in each country, in a world without trade, are given in Table 34.6 and Table 34.7. What would be the equilibrium price and quantity in each country in a world without trade? How can you tell? What would be the equilibrium price and quantity in each country if trade is allowed to occur? How can you tell? Sketch two supply and demand diagrams, one for each country, in the situation before trade. On those diagrams, show the equilibrium price and the levels of exports and imports in the world after trade. If the Land of Submarines imposes an anti- dumping import quota of 30, explain in general terms whether it will benefit or injure consumers and producers in each country. Does your general answer change if the Land of Submarines imposes an import quota of 70?