In Agricultural Trade Agreements, three categories of distortionary policies exist, called Market access restrictions, Domestic support and Export subsidies. Discuss each of these categories using suitable examples
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In Agricultural Trade Agreements, three categories of distortionary policies exist, called Market access restrictions, Domestic support and Export subsidies. Discuss each of these categories using suitable examples
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- Analyze with the help of a graph how an export subsidy affects the terms of trade of the country providing the subsidy. Is the export subsidy desirable from the perspective of overall social welfare of the country? Explain.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 tariffIf the United States adopts a law that every good imported from another country must be visually inspected by government inspectors, then this law might be considered as ______________. Group of answer choices a government bureaucracy a non-tariff barrier an import quota a quota
- A numerical restriction on amount of a good imported is called a Group of answer choices quota. trade tax. tariff. supply tax.can you reword this paragraph? Voluntary export restraint (VER) is really a restriction upon on quantity of goods which an exporting nation can export to another country. VER is self-imposed on the exporting country. As for Ghana, this country is importing food, which is an agriculturally inclined country. This means that there is something lacking with the agriculture sector if Ghana is not even able to meet the needs of its citizens’ demand. Voluntary export restraint (VER) is a type of non-tariff barriers to trade. It could be the outcome of requests made by the importing country to provide a measure of protection for its domestic businesses producing competing goods. And this is what the government of Ghana has done. VER also would temporarily increase jobs for domestic workers in the agricultural sector. Protection from VER encourages domestic producers to recruit locally. Security from foreign exchange decreases productivity in the long run. Without competition, it is not…If a small country uses a quota to limit imports of a particular product, producers in the foreign country will receive some benefits if the country allocates its quota by Group of answer choices auctioning permits that allow winning bidders to import the good asking its trade partner to use a voluntary export reduction giving the quota rights away to home retailers using a rent-seeking method
- 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.Suppose the market for steel is expressed as follows: Domestic demand: p = 40 - 0.2q, or q = 200 - 5p Domestic supply: p = 0.2q, or q = 5p Domestic supply (foreign): p = 0.1q, or q = 10p a) What is the equilibrium price and quantity if there is free trade, with no restriction on imports? b) What is the equilibrium price and quantity if the government imposes a binding import quota of 20 units? Depict parts a and b on a single graph. c) How are US steel firms affected by the quota? US automakers? Explain briefly.Discuss the gains and losses from trade in terms of consumer and producer surplus.
- If tariffs, quotas, and subsidies each cause net welfare losses, why are they so common, especially in agriculture, among the industrialized countries such as the United States and the members of the European Union?The United States currently imports all of its coffee. The annual demand for coffee by U.S. consumers is given by the demand curve Q = 250 – 10P, where Q is quantity (in millions of pounds) and P is the market price per pound of coffee. World producers can harvest and ship coffee to U.S. distributors at a constant marginal (= average) cost of $8 per pound. U.S. distributors can in turn distribute coffee for a constant $2 per pound. The U.S. coffee market is competitive. Congress is considering a tariff on coffee imports of $2 per pound. i. Calculate the tax revenue collected by the government. ii. ii. Does the tariff result in a net gain or a net loss to society as a whole?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.