Summary of the Picture is needed CHINESE SOLAR PANELSAlthough voluntary export restraints are no longer allowed under WTO rules,this only applies to an agreement negotiated by governments and imposed ontoexporters. Recently, a European Union-China trade dispute over a surge in Chi-nese exports of solar panels was resolved by the Chinese producers "agreeing"to limit their exports to EU countries below 7 gigawatts-worth of solar panels peryear-along with a minimum price floor for those units. EU solar panel makerswere disappointed, as this agreement forestalled the imposition of 47 percentanti-dumping duties on all Chinese solar panel imports (the threat that generatedthose concessions by Chinese solar panel producers). However, the impositionof the anti-dumping duties would have triggered a significant retaliation fromChina, whose officials had already drawn up a list of European products-includ-ing luxury fashion goods and wines-that would be subjected to stiff import dutiesinto China. Chinese producers were persuaded to agree to the export limit andprice floor instead, since this would allow them to keep the higher prices chargedin the European Union. The main losers are European consumers, who will paysubstantially more for solar power (and the environment).

The World Trade Organization (WTO) is the only international organization associated with the…

Answered: Summary of the Picture is needed

Business

Economics

Summary of the Picture is needed

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 2PA

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Please no written by hand solutions Question 1: State whether each of the following statements is true or false. Justify for all statements and illustrate graphically/numerically whenever necessary. 1. The steeper the supply and demand curves for a certain commodity, the lower the trade and revenue effects of a tariff imposed on imports of such commodity. 2. With a positive nominal tariff on the final commodity, more of the commodity is produced domestically than would be under free trade. 3. If imported inputs constitute half the value of the final commodity and are admitted duty free, then the rate of effective protection is equal to the nominal tariff rate on the final commodity. 4. Export subsidies can be regarded as a form of dumping.
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?
If one assumes that automobile transportation costs from South Korea to France surpass the price differential in autos that existed before trade between South Korea and France, then, in similar cases trade is:a. Unattainableb. Probablec. Very profitabled. Marginally profitable
Under what circumstances would the declining or dying industry argument for establishing barriers to imports be valid? What measures(s) is/are more efficient than an import tariff if maintaining current production level is the goal of government policy? (In your answer, justify those measure(s) by comparing with import tariff).
You are the manager of the only firm worldwide that specializes in exporting fish productsto Japan. Your firm competes against a handful of Japanese firms that enjoy a significant first-mover advantage. Recently, one of your Japanese customers has called to inform you that theJapanese legislature is considering imposing a quota that would reduce the number of poundsof fish products you are permitted to ship to Japan each year. Your first instinct is to call thetrade representative of your country to lobby against the import quota. Is following throughwith your first instinct necessarily the best decision? Explain in a few sentences.
Suppose the world price of clothing is $50 per unit. Domestic demand and domestic supply aredetermined by the following equations:Domestic Demand: p = 200 − 2qDomestic Supply: p = 20 + 3qwhere p and q represent price and quantity, respectively. Domestic government levies an ad valorem tariff rate of 100% 11. Under the 100% tariff protection, domestic economy’s national welfare is worth _____ or so.A) $1,250B) $2,850C) $3,025D) $4,73312. Under free trade, domestic economy’s national welfare is worth _________or so.A) $5,250B) $5,775C) $6,125D) $6,57513. Suppose that domestic economy moves from the initial free trade regime to the 100% tariffregime. Then the deadweight loss resulting from production inefficiency can be calculated at_________ or soA) $416.75B) $455.25C) $525.15D) none of the above
Assume a perfectly competitive market and the exporting country is small. Using a demand and supply diagram, show the impact of increasing standards on a low-income exporter of toys. Show the tariffs impact. Is the effect on toy prices the same or different? Why is a standards policy preferred to tariffs?
QUESTIONS : D. Would you agree if the UK imposed import protection for wheat and corn to protect domestic wheat and corn farmers? Give reasons and basis for your argument. What are the negative and positive impacts that will be faced by the UK when implementing this protection policy (Give at least 5 answers for each positive & negative impact). POINT D ANSWER : Would defeinetly not go with the idea and not accept the trade proctectionsim, as it of more harm than good. Reasons are as follow: -The restricted options of customers and paying more for products and services. A main consequence of trade protectionism would be that, as there can be limits on how much can be imported, buyers may have a restricted variety of products and services. Shoppers would have a very limited option as to the amount, standard and form of product that might otherwise be available to them without competitive protection due to these quotas. -Exchange rate caps have induced long-term inflation because…
6. Which of the following considerations need not lead to in-country distribution effectsfrom trade?A. Labor markets display significant frictions.B. Capital may be industry-specific.C. It takes time to learn new skills.D. Wages and productivity in one country are much higher than in its trading partner.
consider the domestic demand for apples to be given by Qd= 25-0.5P and that apples can be imported at an international price of $40 per basket. if the government percieves this price to be too high and decides to subsidize imports by $20 per basket. this policy will increase the imports of apples by ____ and create a deadweight loss of ____. a) 5 units, $20 b) 20 units, $800 c) 15 units, $50 d) 10 units, $100
Consider a small country that exports steel. Supposethat a “pro-trade” government decides to subsidizethe export of steel by paying a certain amount foreach ton sold abroad. How does this export subsidyaffect the domestic price of steel, the quantity ofsteel produced, the quantity of steel consumed, andthe quantity of steel exported? How does it affectconsumer surplus, producer surplus, governmentrevenue, and total surplus? Is it a good policy fromthe standpoint of economic efficiency? (Hint: Theanalysis of an export subsidy is similar to the analysisof a tariff.)
15. Data and empirical observations have validated the fact thata. Sectors specific to export industries tend to lose from international trade, while sectorsspecific to import-competing industries tend to gain.b. All sectors tend to lose.c. All sectors tend to gain.d. None of the above is true.