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- Coffee is now the second most traded commodity in the world after crude oil. Not only has demand for various coffee products risen sharply in Western countries in recent years, increasingly there is also greater taste for coffee drinks in developing countries such as China and India. In addition, by-products of coffee beans have become popular such as coffee leaves which can be used to brew a tea with known health benefits. However, as a natural produce, coffee plants are subject to weather conditions. Recently major producers such as Brazil have been plagued by droughts. Using the demand-supply model, explain the likely effects of these phenomena in the coffee bean market. How can a market analyst use this information to her advantage?Due to good weather, there is an increase in the demand for the good. the new demand equation is qd=190-2p. The government is trying to decide between two options: * Maintain the number of quotas and let the market adjust, or * Maintain the price support and increase the number of quotas suppose that the government decides to maintain the number of quotas and let the market adjust. c) calculate the i) price observed in the market ii). consumer surplus iii). producer surplusThis is not a writing assignment, this is a multiple-choice question Tariffs are taxes on imported items. The impact of tariffs can be variable. Which of the below statements is most likely to be INCORRECT for tariffs? Group of answer choices The government may gain temporarily from the taxes collected through the tariffs on imports. The burden of the tariff is invariably borne by foreign imports. Tariffs can lead to retaliation, and eventually, trade wars. Tariffs drive up the cost of imported resources and consumer goods and thus end up hurting both domestic producers and consumers. Tariffs help producers threatened by foreign competition and may keep such businesses alive, no matter how inefficient they may be.
- . Ricardian Model. Consider two countries: A and B. Labour is the only factor of production for goods X and Y. Consider the following matrix of unit labour requirements. X Y Labor Endowments Country A aLx = 8 aLy = 4 240 Country B aLx* = 6 aLy* = 2 120 Which country has an absolute advantage in producing good X? Good Y? Which country has comparative advantage in producing good X? What is the autarky relative price of good X for country A? For country B? Draw the world relative supply curve RS for good X. Label all the axes (relative price of good X on the vertical axis and world output of x relative to y on the horizontal axis) and the relevant points. Suppose that the world relative demand RD for good X is given by: (Px/Py) = 7 – 9 * ( ( Qx +Q*x) / (Qy + Q*y) ). With free trade: (i) What will be the equilibrium world relative price of good X be equal to? (ii) Calculate the equilibrium wage rate w in A relative to that…Identify the following statement's accuracy and briefly state why. government intervention is needed to assist the growth of the local economy. Import restriction is used to limit the supply of foreign products, thus artificially increasing the price of foreign products. Import restrictions such as import tax will increase the price of both foreign and local products. Market failure is the equal and efficient distribution of resources in a market. Market failure occurs due to the failure of price mechanism where the supply of a product does not equal the demand of a product, leading to an absence of an equilibrium point in the market.Economic mobility refers to __________________. A company's ability to pay its bills from cash or from assets that can be turned into cash very quic Recessions (caused by Capitalism?) make things worse for the poor because they are so vulnerable to price fluctuations We are losing the middle class and the U.S. is becoming more separated into rich and/vs. poor. The ability of an individual, family or some other group to improve (or lower) their economic status—usually measured in income. A company's ability to pay its bills from cash or from assets that can be turned into cash very quickly
- TRUE OR FALSE (a) Only the final market value of the products will be included in the computation of the Gross National Product. (b) Monetary policy involves the regulation of taxes. (c) The individual price is the main consideration in measuring the inflation rate. (d) In all economies, there is always the presence of the natural rate of unemployment. (e) to attain external balance, a country must earn enough from abroad to sustain the import 6. demand.Consider the specific-factors model with 2 goods: manufacturing and agriculture. Manufacturing requires labour and sector-specific capital, while agriculture requires labour and sector-specific land. Labour is freely mobile across sectors. The government is considering to impose an import tariff on agricultural products. Which of the following is true? (a) The relative price of agricultural products will go down. (b) Capitalists will support this initiative. (c) Agricultural production will increase. (d) Marginal product of labour will decrease in manufacturing. Explain your answer clearly.Consider the specific-factors model with 2 goods: manufacturing and agriculture. Manufacturing requires labour and sector-specific capital, while agriculture requires labour and sector-specific land. Labour is freely mobile across sectors. The government is considering to impose an import tariff on agricultural products. Which of the following is true? (a)The relative price of agricultural products will go down. (b)Capitalists will support this initiative. (c)Agricultural production will increase. (d)Marginal product of labour will decrease in manufacturing. Explain your answer clearly. Limit your explanation to 200 words.
- A variable levy exists when a country A. removes expected tariffs based on supply and demand for a good or service. B. allows one importer to pay a lower tariff than another importer for the same type of goods or services. C. guarantees that the market price of an import will be the same as that of domestically produced goods. D. creates a tariff that requires a percentage of the entire invoice value be paid on imports.The annual rate of growth of commodity output during the Civil War: Group of answer choices a)None of the above is correct. b)increased by roughly 25 percent. c)held constant from the previous decade. d)fell by more than 50 percent.Canada’s forestry industry (composed mainly of those involved in the lumber industry) directly employs about 370,000 workers and indirectly employs an additional 510,000 people in support services. Forestry products account for nearly 3 percent of Canada’s gross domestic product (GDP) and 14.1 percent of its exports. Lobbyists for the U.S. lumber and timber producers recently filed a complaint with the U.S. International Trade Commission (ITC) and the U.S. Department of Commerce (DOC) alleging that the Canadian government provided a subsidy to its lumber producers and caused harm to U.S. lumber and timber producers. As a result of these concerns, one U.S. lobbyist proposed the imposition of a 15 percent excise tariff on all Canadian forestry products. Determine the likely impact of the proposed 15 percent excise tariff on the equilibrium price and quantity of lumber exchanged in the United States. Would domestic consumers and producers benefit from the proposed tariff? Explain…
