S IX Price per pound 0 O vertical; P; Q Q O vertical; P'; Q O horizontal; P; Q O horizontal; P; Q' Q' Q" S' Refer to Exhibit 19.3, which shows the supply of a product in the United States. If the government establishes a sugar quota of Q to Q. the supply curve combining U.S. production and imports becomes at the world price of and remains horizontal until the quantity supplied reaches D

S IX Price per pound 0 O vertical; P; Q Q O vertical; P'; Q O horizontal; P; Q O horizontal; P; Q' Q' Q" S' Refer to Exhibit 19.3, which shows the supply of a product in the United States. If the government establishes a sugar quota of Q to Q. the supply curve combining U.S. production and imports becomes at the world price of and remains horizontal until the quantity supplied reaches D

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand, And Government Policies

Section: Chapter Questions

Problem 10PA

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A tariff is a tax on imported goods. Suppose the U.S. government cuts the tariff on imported flat screen televisions. Using the four-step analysis, how do you think the tariff reduction will affect the equilibrium price and quantity of flat screen TVS?
Explain how a subsidy on agricultural goods like sugar adversely affects the income of foreign producers of imported sugar.
b. 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. If there is no tariff, how much do consumers pay for a pound of coffee? What is the quantity demanded?ii. If the tariff is imposed, how much will consumers pay for a pound of coffee? What is the quantity demanded?
Part F. If home country imposes a specific tariff of $15 per unit of good Y imported, what is the tariff revenue? Show your work. Part G. 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 domestic price of good Y) as the specific tariff of $15? Explain your reasoning. Part H. Consider the use of import tariff vs. import quota in Home country that will result in the same amount of good Y imports and the domestic price of good Y. If quota rents are given to Foreign country, which policy, i.e., import tariff vs. import quota, is preferable by Home country on the basis of its effect on social welfare? Explain your reasoning.
Q_{D}=400-20 P \\ Q_{S}(\text { Domestic })=30 P-30 \\ Q_{S}(\text { Imported })=10 P-50 \end{array} \] The demand and supply functions for productAare given above. a. The government imposes a price ceiling at 4 . In this case, specify the market price, quantity. In this case, is there either excess supply or excess demand? How much? b. The government imposes a price floor at 9 . In this case, specify the market price, quantity. In this case, is there either excess supply or excess demand? How much? c. The government wants to impose taxes on this product. If the tax is 3 for each sale, find the new market price and quantity. how much of this quantity is coming from imported? d. According to the policy applied in the (c), find the tax share of suppliers and consumers. e. In order to protect the domestic producer, the government imposed tax=2on the imported product. Under new policy, calculate market price and quantity. f. According to the policy applied in the (e), has the policy of the…
Suppose Home is a small exporter of wheat. At the world price of 100 US dollars per tonne, Home growersexport 20 tons of wheat. Now suppose the Home government decides to support its domestic producers withan specific export subsidy of 40 US dollars per tonne. Use Figure 1 to answer the following question A. ) Calculate the effect of the export subsidy on consumer surplus, producer surplus and government revenue;depict each of these in a graph. What is the overall net effect of the export subsidy on Home welfare?
Suppose Home is a small exporter of wheat. At the world price of 100 US dollars per tonne, Home growers export 20 tons of wheat. Now suppose the Home government decides to support its domestic producers with a specific export subsidy of 40 US dollars per tonne. Use Figure 1 to answer the following questions: (a) Explain why consumer and producer surplus can be used to gauge the change in welfare caused by the export subsidy on individuals and firms? (b) What is the quantity exported by Home under free trade and with the export subsidy? (c) Calculate the effect of the export subsidy on consumer surplus, producer surplus, and government revenue; depict each of these in a graph. What is the overall net effect of the export subsidy on Home welfare?
Using demand and supply, illustrate the effects of a quota imposed by the Ghanaiangovernment on Cote d’Ivoire cocoa. Show the Cote d’Ivoire cocoamarket and the Ghanaiancocoamarket.
Please see attachment and show your work . What are the steps and answer with explanation? Please examine the market for AC units below. In this market, the Home nation has imposed a quota limiting the number of AC units that foreign nations are allowed to export into the Home economy. If the home nation increased the level of the quota (theerby allowing more AC units to be imported into the Home economy), then we would expect ___________ to increase in the home economy. 1. consumer surplus 2. producer surplus 3. quota revenue 4. deadweight loss
12. Government prefers to reduce imports with a tariff instead of a quota depends on whetherA. imports are completely eliminatedB. consumer demand is elastic.c. the demand curve is downward slopingD. barriers prevent new firms from enteringE. production costs are.constant. Thanks
Suppose Home is a small exporter of wheat. At the world price of 100 US dollars per tonne, Home growers export 20 tons of wheat. Now suppose the Home government decides to support its domestic producers with an specific export subsidy of 40 US dollars per tonne. Use Figure 1 to answer the following questions: I'll attach the graph below A. Explain why consumer and producer surplus can be used to gauge the change in welfare caused by the export subsidy on individuals and firms. B. What is the quantity exported by Home under free trade and with the export subsidy? C. Calculate the effect of the export subsidy on consumer surplus, producer surplus and government revenue; depict each of these in a graph. What is the overall net effect of the export subsidy on Home welfare?
Q4. Assume the market of non-medical masks can be described by the following equations: Demand: QD= 20 - P Supply: QS=2P-10 Where the quantity QP and QS are in millions, and price P is in dollars. Suppose all the masks are imported, and government decided to set a quota at 5 million units. a) Compute the pre-quota equilibrium price and quantity and illustrate your answers graphically. b) In your graph of a) Clearly show the con umer surplus (CS) and producer surplus (PS) before and after the quota. c) Show the dead weight loss (DWL) in the graph and calculate it.