QUESTION 9 This figure shows demand and supply for a product in country A, which is interested in engaging in international trade. The import price from country Bs 3 and from country Cis $4. Country A imposes a fixed tariff of $2 per unit of import. Answer the folowing questions based on these assumptions Demand Supply Based on information provided in the figure above, if country A decides to enter into a free trade agreement with country C the welfare change to consumers will be the area: a loss of GHSR b.gain of GHSR c gain of GHFE d. loss of GHFE

QUESTION 9 This figure shows demand and supply for a product in country A, which is interested in engaging in international trade. The import price from country Bs 3 and from country Cis $4. Country A imposes a fixed tariff of $2 per unit of import. Answer the folowing questions based on these assumptions Demand Supply Based on information provided in the figure above, if country A decides to enter into a free trade agreement with country C the welfare change to consumers will be the area: a loss of GHSR b.gain of GHSR c gain of GHFE d. loss of GHFE

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter34: Globalization And Protectionism

Section: Chapter Questions

Problem 57P: The country of Pepperland exports steel to the Land of Submarines. Information for the quantity...

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Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The demand (d) and supply (s) for cameras In Thailand and Japan is described by the following functions: QsT=-5+14P QsJ=-10+14P QdT=60-P QdJ=80-P P is the price measured in a common currency used in both countries, such as the Thai Baht. Compute the equilibrium price (P) and quantities in each country without trade. Now assume that free trade occurs. The free-trade price goes to 56.36 Baht. Who exports and Imports cameras and in what quantities?
How would direct subsidies to key industries be preferable to tariffs or quotas?
The country of Pepperland exports steel to the Land of Submarines. Information for the quantity demanded (Qd) and quantity supplied (Qs) in each country, in a world without trade, are given in Table 34.6 and Table 34.7. What would be the equilibrium price and quantity in each country in a world without trade? How can you tell? What would be the equilibrium price and quantity in each country if trade is allowed to occur? How can you tell? Sketch two supply and demand diagrams, one for each country, in the situation before trade. On those diagrams, show the equilibrium price and the levels of exports and imports in the world after trade. If the Land of Submarines imposes an anti- dumping import quota of 30, explain in general terms whether it will benefit or injure consumers and producers in each country. Does your general answer change if the Land of Submarines imposes an import quota of 70?
Are the gains from international trade more likely to be relatively more important to large or small countries?