Domestic Domestic Price ($) 20 40 60 Demand 180 160 140 120 100 80 Supply 30 60 90- 120 150 180 80 100 120 2. Assume instead that Economica decides to place a quota of 75 units on foreign imports instead of a tariff. a. Draw the import demand and foreign export supply curve in this case. Calculate the domestic price c. The effect of the quota on consumer surplus d. b. The deadweight loss of the quota e. The quota rent Under what circumstances will the government receive the quota cent Under what circumstances will foreigners receive the quota ent?
Domestic Domestic Price ($) 20 40 60 Demand 180 160 140 120 100 80 Supply 30 60 90- 120 150 180 80 100 120 2. Assume instead that Economica decides to place a quota of 75 units on foreign imports instead of a tariff. a. Draw the import demand and foreign export supply curve in this case. Calculate the domestic price c. The effect of the quota on consumer surplus d. b. The deadweight loss of the quota e. The quota rent Under what circumstances will the government receive the quota cent Under what circumstances will foreigners receive the quota ent?
Chapter19: International Trade
Section: Chapter Questions
Problem 2.5P
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Transcribed Image Text:Domestic
Demand
180
160
140
120
100
80
Domestic
Price ($)
20
40
60
80
100
120
Supply
30
60
90-
120
150
180
Assume instead that Economica decides to place a quota of 75
2.
units on foreign imports instead of a tariff.
Draw the import demand and foreign export supply curve in this
a.
case.
Calculate the domestic price
The effect of the quota on consumer surplus
b.
c.
d.
The deadweight loss of the quota
The quota rent
Under what circumstances will the government receive the quota
e.
f.
rent
circumstances will foreigners receive the quota
g.
rent?
Under what
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