omestic Demand Function: p= 100-4Q Domestic Supply Function: p= 40+2.5Q There is an international trade price equal to $15 (pw=15). Although, The Government institutes an import tariff of $9 per unit. Suppose that instead of an import tariff, the government wanted to put an import quota that would make the same change in Producer Surplus as the $9 tarrif A) What is the size of this import Quota that makes this same change in Producer Surplus as the $9 Tariff? B) What is the Deadweight Loss under this Import Quota?

omestic Demand Function: p= 100-4Q Domestic Supply Function: p= 40+2.5Q There is an international trade price equal to $15 (pw=15). Although, The Government institutes an import tariff of $9 per unit. Suppose that instead of an import tariff, the government wanted to put an import quota that would make the same change in Producer Surplus as the $9 tarrif A) What is the size of this import Quota that makes this same change in Producer Surplus as the $9 Tariff? B) What is the Deadweight Loss under this Import Quota?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.10P

See similar textbooks

Similar questions

Domestic Demand Function: p= 80-4Q Domestic Supply Function: p= 20+2.5Q There is an international trade price equal to $15 (pw=15). Although, TheGovernment institutes an import tariff of $9 per unit. Suppose that instead of an import tariff, the government wanted to put an import quota that would make the same change in Producer Surplus as the $9 tarrif A) What is the size of this import Quota that makes this same change in Producer Surplus as the $9 Tariff? B) What is the Deadweight Loss under this Import Quota?
Assume that the demand function for a commodity is given by Qd = 3 – 0.1P and that the supply function is given by Qs = 1 + 0.05P, where P is the price, Qd is the quantity demanded and Qs is the quantity supplied. Suppose the government levies a tax of t cedis per unit sold. If the market is in equilibrium and the tax is increased, show how the price, quantity and tax revenue will change once the new equilibrium has been attained.
When the price is 10 TL for each pack of cookies, the supply is 250 thousand and the demand is 120 thousand boxes.When the price is 9,5 TL for each pack of cookies, the supply is 200 thousand and the demand is 240 thousand boxes. Since the price-demand and supply-demand equations are linear; Find and interpret the market equilibrium point after-tax if the consumer is taxed at a rate of 0,75 TL per product.
When the price is 10 TL for each pack of cookies, the supply is 250 thousand and the demand is 120 thousand boxes.When the price is 9,5 TL for each pack of cookies, the supply is 200 thousand and the demand is 240 thousand boxes. Since the price-demand and supply-demand equations are linear; If a tax is applied to the consumer at the rate of T=0.75 TL per product, find and interpret the market balance point after tax.
When the price is 10 TL for each pack of cookies, the supply is 250 thousand and the demand is 120 thousand boxes. When the price is 9,5 TL for each pack of cookies, the supply is 200 thousand and the demand is 240 thousand boxes. Since the price-demand and supply-demand equations are linear; Calculate the producer and consumer annuity and find and interpret the market equilibrium point after-tax if the consumer is taxed at a rate of 0,75 TL per product.
In the market for a good, the aggregate demand and supply are summarized by the following expressions: Qd (p) = 20−p & Qs (p) = 2p−4 Assume the government charges a per-unit tax of τ dollars on each unit of the good purchased by the consumers. If the resulting equilibrium quantity is 8 units of the good, what must be the value of the tax?
Suppose the equation for the demand curve for some product X is P = 8 − 0.6Q and the supply curve is P = 2 + 0.4Q. What are the equilibrium price and quantity? Now suppose an excise tax is imposed on X such that the new supply equation is P = 4 + 0.4Q. How much tax revenue will this excise tax yield the government? Graph the curves, and label the area of the graph that represents the tax collection “TC” and the area that represents the efficiency loss of the tax “EL.” Briefly explain why area EL is the efficiency loss of the tax but TC is not.
Suppose demand is given by ??(?) = 1 – ? and supply ??(?) = ?, with prices in dollars. If buyers pay a 10 cent tax, what is the after tax demand? Do the same computations as the previous exercise and show that the outcomes are the same. Suppose both demand and supply are linear, ??=?−? and ??=?+?p . A quantity tax is a tax that has a constant value for every unit bought or sold. Determine the new equilibrium supply price ?? and demand price ?? when a quantity tax of amount t is applied. The Manning Company has two factories, one that makes roof trusses, and one that makes cabinets. With? workers, the roof factory produces trusses per day. With n workers, the cabinet plant produces 5. The Manning Company has 400 workers to use in the two factories. Graph the production possibilities frontier. (Hint: Let ? be the number of trusses produced. How many workers are used making trusses?) Alarm & Tint, Inc., has 10 workers working a total of 400 hours per week. Tinting takes 2 hours…
In a closed economy, the demand and the supply function for a given commodity are QD =150-2p and QS = - 50+2p, respectively. Suppose that the government provides a subsidy equal to16 Euros per unit of quantity supplied. Determine the price the producers receive, the price the consumers pay, the total sales, and the cost to the taxpayers in the industry equilibrium with the subsidy.
Given: Qd = 240 - 5P Qs = P Where Qd is the quantity demanded, Qs is the quantity supplied and P is the price. Suppose the government decides to impose a tax of $12.00 per unit on sellers in this market. A) What is the supply equation after tax? B) What is the demand equation after tax?
Suppose the market demand for milk is Qd = 40 – 4P Where Qd is millions of gallons demanded and P is price per gallon. Suppose the market supply for milk is Qs = - 40/3 + 20/3P Suppose a tax of $1 per gallon of milk is imposed in this market. What is the new price paid by consumers and What is the quantity of milk sold? *Hint: It does not matter if the tax is collected from purchasers or sellers.
Q2. Suppose the following demand and supply function of a commodity. 15 Qd = 220 - 20P Qs = -200 + 40P After imposing tax, the new supply function is Qs = -240 + 40P Find out the equilibrium price and quantity before tax. Find consumer and producer surplus before tax. Determine government revenue and dead weight loss after tax.