Please examine the Home market for raspberries below. Note that the world price (Pw) for raspberries has been set at $5. This nation, after allowing free trade, has imposed a $1 tariff on each unit of raspberries that are imported. As a result of this tariff, we can conclude that: Price $12 $11 $10 $9 $8 $7 Pt $6 Pw $5 $4 $3 $2 $1 Home Market for Raspberries 1 2 3 S O None of the above. D 5 6 7 8 9 10 Quantity O Home producer surplus will fall. .O The Home government will receive $4 in tariff revenue. Consumer surplus in the Home market will be higher than it was under free trade.
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- Consider a small country that exports steel. Suppose the following graph depicts the domestic demand and supply for steel in this country. One of the two price lines represents the world price of steel. ecause this country exports steel, the world price is represented by . Suppose that a “pro-trade” government decides to subsidize the export of steel by paying $10 for each ton sold abroad. With this export subsidy, the price paid by domestic consumers is per ton, and the price received by domestic producers is per ton. The quantity of steel consumed by domestic consumers , the quantity of steel produced by domestic producers , and the quantity of steel exported . True or False: With the export subsidy, domestic producers will sell steel to domestic consumers and sell the rest abroad. True False Under the export subsidy, consumer surplus is and producer surplus is . Government revenue by (increases or Decreases) . As a…Assume that the domestic supply and demand for a good are given by the following equations. Q = 500 – 20 P Q = 80 + 10 P If the world price is $10 what is the free trade level of imports? Calculate the net welfare effects of a quota of 60 units. (Quota rent goes to foreign suppliers ( VERS) . Use also graph to show the effects of this quota. If %30 tariff imposed on the world price(10$) , what will be net welfare effects? Compare this welfare effect with the one in (a) and comment. Use a new graph to show the effects. Suppose the domestic industry is a Monopoly, with which commercial policy instrument ( quota or tariff? - assuming both of them yields the same level of imports- ) would it prefer to be protected and why? Explain.1) Assume that the domestic supply and demand for a good are given by the following equations. Q = 500 – 20 P Q = 80 + 10 P a) If the world price is $10 what is the free trade level of imports? Calculate the net welfare effects of a quota of 60 units. (Quota rent goes to foreign suppliers ( VERS) . Use also graph to show the effects of this quota. b) If %30 tariff imposed on the world price(10$) , what will be net welfare effects? Compare this welfare effect with the one in (a) and comment. Use a new graph to show the effects.
- Now, suppose that Island is a large exporting country with the following demand and supply functions and the free-trade world price is $5,000 per unit. D = 900,000 − 150P and S = 100,000 + 50P The Island government offers an export subsidy that increases the domestic market price to $5,500 and lowers the world price to $4,500. However, starting next month, the Island government will be removing the export subsidy in compliance with the latest international trade pact. A. What is the impact of the removal of the subsidy on domestic consumers? B. What is the change in producer surplus due to the movement to free trade? C. What is the net effect of moving to free trade on Island welfare?The graph below shows the market for tires in the United States, a nation that is open to international trade but is assumed to be a price taker unable to affect the world price of tires. a. Using the graph above, at the world price of $80 per tire, how many tires will the United States import? _____million tires Now Suppose the U.S. government imposes a quota as shown in the graph above. b. Using this same graph, indicate the new market equilibrium with the quota imposed and the domestic quantity supplied (Qs). Instructions: Use the tools provided "New Equilibrium" and "Qs + quota" to indicate the new market price, quantity demanded, and domestic quantity supplied with this quota. c. As a consequence of this quota, how many tires will the United States import now? _____million tires How many tires will be supplied domestically? _____million tires Now suppose instead that the U.S. government imposes a quota with the goal of reducing the number of tires…Assume that the domestic supply and demand for a good are given by the following equations. Q= 400 - 30 P Q = 50 + 20Pa. If the world price is $4, what is the free trade level of imports?Calculate the net welfare effects of a quota of 50 units. (Quota rent captured by the government) Use also graph to show the effects of this quota. b. Imposing %25 tariff is much better than imposing a quota of 50 units, when net welfare cost is considered. Do you agree or disagree? When answering this question, assume that all the quota rents will be gained by the government.
- Assume that you have been hired by an International Organization to be consulted on variousissues that the country Motherland faces. For this exercise, assume that Motherland is a smallagricultural economy. (a) Motherland imports electronics from the United States. The government of Motherland is considering to impose quotas on these electronics imports coming from the United States. Would you recommend it? Explain your answer. In your explanation, distinguish the effect on the consumers of electronics, the domestic producers of electronics and the government. (b)The government of Motherland wants to jump start industrial production. Over time the main objective is to convert this agricultural economy into an industrial nation. On the basis of the experiences of Argentina and Singapore, what policies would you suggest?Suppose Russia can produce automobiles relatively cheaply, but they have poor gas mileage and create a great deal of air pollution. The U.S. government, concerned about the quality of air, would like to see fewer Russian automobiles and more cleaner-running American automobiles on the road. What is the nature of the market failure that would justify the U.S. government taking some action against the importation of Russian automobiles? Explain why imposing a tariff is a second-best policy to employ in this case and what policy choice would be more efficient if: i) US carries out its own solution; ii) the two countries governments cooperate.Hi can you please help me with the calculations and working? Imagine a market with demand and supply as follows: D: p=10-q and S: p=q. 1. Find the equilibrium price, quantity, producer and consumer surplus, and total welfare 2. Now suppose there is a world price of $1 for the good. Which party (consumers or producers) would refuse to transact at the autarky price? Describe the new equilibrium in terms of: I. Consumer and producer surplus and welfare II. Imports 3. Now suppose a $1 tariff is introduced, making the local price $2. You may assume for now the imposition of a tariff does not change the world price. Compare welfare (including the government tariff revenue)I. With the situation before the tariffII. With the situation in autarky 4. Suppose this country is the only country in the world that demands this good. Derive a world demand for the good over the range from Price = 0 to Price = autarky Price. (hint: The world demand is the demand for imports to this country.) 5. Go back…
- Consider the supply and demand schedules in this figure (Qd=10-2P, Qs=3P). In autarky, what is the total surplus in this market? (enter a whole number, no symbols or units) Consider the supply and demand schedules in this figure (Qd=10-2P, Qs=3P). With free trade, and a world price of $1, what is the total surplus in this market? (enter a number, no symbols or units) Consider the supply and demand schedules in this figure (Qd=10-2P, Qs=3P). With trade, a tariff equal to $0.50, and a world price of $1, what is the revenue from the tariff in this market? (enter a number, no symbols or units)Consider two countries, home and foreign and a single good, Y. Assume that home country imports good Y from foreign country. The import demand curve for good Y in home country is given by: MD = 170 – 2PY and the export supply curve for good Y in Foreign country is given by: EX = PY – 40. Free Trade Price: $70 30 Units of Good Y are traded under free trade If a tariff of $15 is imposed by the home country on each unit of good Y imported, Foreign exporters receive a price of $60. If a tariff of $15 is imposed by the home country on each unit of Good Y imported, Home consumers pay $75 If a tariff of $15 is imposed by the home country the number of goods traded is 20. a) If home country imposes a specific tariff of $15 per unit of good Y imported, what is the tariff revenue? Show your work. b) Assume that instead of a specific tariff, an import quota will be used on good Y. What is the amount of the quota that will have identical effects (in terms of amount of good Y imports and the…Consider two countries, home and foreign and a single good, Y. Assume that home country imports good Y from foreign country. The import demand curve for good Y in home country is given by: MD = 170 – 2PY and the export supply curve for good Y in Foreign country is given by: EX = PY – 40. Free Trade Price: $70 30 Units of Good Y are traded under free trade If a tariff of $15 is imposed by the home country on each unit of good Y imported, foreign exporters receive a price of $85. a) If home country imposes a specific tariff of $15 per unit of good Y imported, what is the price of good Y that Home consumers pay? Show your work. b) If home country imposes a specific tariff of $15 per unit of good Y imported, how many units of good Y are traded now? Show your work. c) If home country imposes a specific tariff of $15 per unit of good Y imported, what is the tariff revenue? Show your work. d) Assume that instead of a specific tariff, an import quota will be used on good Y. What is the…