Quotas have the effect of O Decreasing supply, raising price, and increasing quantity O Decreasing demand, decreasing price, and decreasing quantity O Decreasing supply, raising price, and lowering quantity O Increasing demand, raising price, and raising quantity O Increasing supply, decreasing price, and increasing quantity
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- Using demand and supply, illustrate the effects of a quota imposed by the Canadian government on US wheat . Show the US wheat market and the Canadian wheat market.A low-income country decides to set a price ceilingon bread so it can make sure that bread is affordable tothe poor.Table 3.11 provides the conditions of demandand supply. What are the equilibrium price andequilibrium quantity before the price ceiling? What willthe excess demand or the shortage (that is, quantitydemanded minus quantity supplied) be if the priceceiling is set at $2.40? At $2.00? At $3.60?Question 2(a) What is the difference between a quota and a subsidy?(b) Explain, using a demand and supply diagram, what effect is likely to occur in a market if the government introduces a subsidy in the production of a good.(c) Discuss whether the elasticity of supply of manufactured goods is likely to be greater than the elasticity of supply of agricultural goods.(d) Can a business change the price elasticity of its demand? If yes, how?(e) How would the knowledge of PED and PES be useful for a farmer?Question 3Major news channel in the country reports that ‘Inflation has been kept at 2 % for the past year which is the lowest it has been for three years. Unemployment has also decreased.’(a) According to this statement, what has happened to the price levels in the country over past three years?(b) Explain what is inflation and how is it measured?(c) Analyze why a reduction in interest rate may cause inflation?(d) Is inflation always bad? What is likely to happen if a country has…
- Q20 In Canada we have government intervention in the dairy market in the form of quotas on milk production. What are two predicted economic effects of this policy? a. A redistribution of income from dairy farmers to consumers of dairy products and an increase in the total amount of economic surplus in the dairy market. b. An equitable distribution of income between dairy farmers and consumers of dairy products and a reduction in the total amount of economic surplus in the dairy market. c. A redistribution of income from consumers of dairy products to dairy farmers and a reduction in deadweight loss in the dairy market. d. A redistribution of income from dairy farmers to consumers of dairy products and a reduction in the total amount of economic surplus in the dairy market. e. A redistribution of income from consumers of dairy products to dairy farmers and a reduction in the total amount of economic surplus in the dairy market. Clear my choiceSuppose 1000units of product A are produced by XYZ limited but the quantity demanded for the product is 2000units. All other things remaining constant,a $18 change in price of product A results in a change in quantity demanded and supplied of 6 and 9 respectively.XYZ has a work force of 500 people who pay an income tax of $200 each to the government. 1.Calculate the new equilibrium price and quantity,suppose the government introduces a subsidy of $10 on each unit of product A.Country C imports 80,000 metric tons of steel from Country U and produces domestically 80,000 metric tons per year. The world price of steel is $500 per metric ton. Assuming linear schedules, research analysts estimated the price elasticity of domestic supply to be 0.50 and theprice elasticity of domestic demand to be -0.25 in the current market equilibrium. Country C imposes an import duty of $150 per metric ton that caused the world price to fall by 10%. Summarise and analyse the quantity of steel produced, consumed and imported in Country C. Analyse and discuss the welfare gain from trade in Country C. Show your answers of the steel market with a proper diagram.
- Q.4. Draw a demand line for celery. No need to find real numbers, just draw the line. Explain why the demand line slopes up. (For the X-axis use Quantity of celery from 0 to 100,000 boxes of celery a month. For the Y axis use price from $0 to $30 a box.) 2. Draw a supply line for celery. Explain why the supply line slopes up. No need to find real numbers, just draw the line. (For the X-axis use Quantity of celery from 0 to 100,000 boxes of celery a month. For the Y axis use price from $0 to $30 a box.) 3. Draw a market diagram for celery. Put the demand and supply line on the same diagram. 4. The demand line represents those consumers who are willing and able to pay. In short, if you can not pay, then you are not part of the demand line. Explain how this does or does not complicate the use of the demand and supply model as a depiction of actual situations.Suppose the supply of a good by domestic firms is QSD = 10 + 2P and the supply by foreign firms is QSF = 10 + P. The domestic demand for the product is given by Qd = 30 − P. 1. In the absence of a quota, what is the total supply of the good? 2. What are the equilibrium price and quantity of the good? 3. Suppose a quota of 10 units is imposed. What is the total supply of the product? 4. Determine the equilibrium price in the domestic market under the quota of 10 units.A low-income county decides to set a price ceiling on bread so it can make sure that bread is affordable to the poor. Table 3.11 provides the conditions of demand and supply. What are the equilibrium price and equilibrium quantity before the price ceiling? What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling is set at 2.40? At 2.00? At 3.50?
- If the government establishes a support price for sugar $12 per cwt. (Hundered pounds) and is willing to buy up any surplus sugar at that price, indicate on your graph the quantity supplied, quantity demanded, and quantity purchased by the government. If the units are million cwt, how much money is required for the government purchases? Show this amount on your graph. Demand for sugar is: Q = 20 - PSupply for sugar is: Q = 2 + P I have calculated that the equilibrium is P = 9 and Q = 11 quantities are in million hundred weight (cwt) and price is dollars per cwt.If the United States implements a subsidy on domestic salmon, this will Question 5Answer a. increase the amount of salmon imported into the United States and increase the production of salmon in the United States. b. reduce the amount of salmon imported into the United States and reduce production of salmon in the United States. c. increase the amount of salmon imported into the United States and reduce the production of salmon in the United States. d. reduce the amount of salmon imported into the United States and increase the production of salmon in the United States. Clear my choice CheckQuestion 5Country C imports 80,000 metric tons of steel from Country U and produces domestically80,000 metric tons per year. The world price of steel is $500 per metric ton. Assuming linearschedules, research analysts estimated the price elasticity of domestic supply to be 0.50 and theprice elasticity of domestic demand to be -0.25 in the current market equilibrium. Country Cimposes an import duty of $150 per metric ton that caused the world price to fall by 10%. What are the terms of trade of the Country C steel market after the tariff was imposed? Explain the welfare effects of both countries