PQ 10.07Suppose that Canada sets an import quota on Japanese laptops. Compared with the equilibrium world price that would exist withno import quotas, we would expect the equilibrium price of laptops in Canada to and the equilibrium price of laptops inJapan toSelect an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.fall; not changeab not change; riserise; risedrise; fall

Explanation:- а) Sinсe imроrt quоtа leаds tо restriсtiоns оn imроrts. Sо demаnd оf…

Suppose that Canada sets an import quota on Japanese laptops. Compared with the equilibrium world price that would exist with no import quotas, we would expect the equilibrium price of laptops in Canada to Japan to and the equilibrium price of laptops in Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a fall; not change b not change; rise rise; rise d rise; fall

Suppose that Canada sets an import quota on Japanese laptops. Compared with the equilibrium world price that would exist with no import quotas, we would expect the equilibrium price of laptops in Canada to Japan to and the equilibrium price of laptops in Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a fall; not change b not change; rise rise; rise d rise; fall

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 1SCQ: Explain how a tariff reduction causes an Increase in the equilibrium quantity of imports and a...

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Explain how a tariff reduction causes an Increase in the equilibrium quantity of imports and a decrease in the equilibrium price. Hint: Consider the Work It Out Effects of Trade Barriers.
Explain how a subsidy on agricultural goods like sugar adversely affects the income of foreign producers of imported sugar.
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?
Trade has income distribution effects. For example, suppose that because of a government-negotiated reduction in trade barriers, trade between Germany and the Czech Republic increases. Germany sells house paint to the Czech Republic. The Czech Republic sells alarm clocks to Germany. Would you expect this pattern of trade to increase or decrease jobs and wages in the paint industry in Germany? The alarm clock industry in Germany? The paint industry in Czech Republic? The alarm clock industry in Czech Republic? What has to happen for there to be no increase in total unemployment in both countries?
The nation of Bermuda is “small” and assumed to be unable to affect world prices. It importsstrawberries at the price of 10 dollars per box. The Domestic Supply and Domestic Demand curvesfor boxes are:S = 60 + 20PD = 1160 − 15P(a) if the import quota is 400 boxes then what is new equilibrium price.
The nation of Bermuda is “small” and assumed to be unable to affect world prices. It importsstrawberries at the price of 10 dollars per box. The Domestic Supply and Domestic Demand curvesfor boxes are:S = 60 + 20PD = 1160 − 15P(a) Assume Bermuda is Completely open to trade. What is the equilibrium price.
The country of Pepperland exports steel to the Landof Submarines. Information for the quantity demanded(Qd) and quantity supplied (Qs) in each country, in aworld without trade, are given in Table 34.6 and Table34.7. a. What would be the equilibrium price andquantity in each country in a world withouttrade? How can you tell?b. What would be the equilibrium price andquantity in each country if trade is allowed tooccur? How can you tell?c. Sketch two supply and demand diagrams, one foreach country, in the situation before trade.d. On those diagrams, show the equilibrium priceand the levels of exports and imports in the worldafter trade.e. If the Land of Submarines imposes an antidumping import quota of 30, explain in generalterms whether it will benefit or injure consumersand producers in each country.f. Does your general answer change if the Land ofSubmarines imposes an import quota of 70?
1. Explain in detail a) What is the welfare impact of quotas compared to tariffs? b) Which one of the two (quotas or tarrifs) is a more flexible tool to use?
Suppose you have the following for white t-shirts market:Market demand is P=125-(3/8)QMarket supply is P=5+(1/8)Q. Suppose it is now possible to obtain white t-shirts from the rest of the world at $15 per item at anygiven quantity. In other words, there is now a global supply that is horizontal at $15.a. Obviously the world price and domestic price will now be $15. Calculate the quantityproduced and demanded domestically. Calculate the difference as imports from the rest of theworld.b. Calculate the CS (Consumer Surplus) and PS (Producer Surplus) under free trade. Who gainswith free trade? Who loses?Hint: Use graphs first.
Consider a small country that exports steel. Supposethat a ''pro--trade'' government decides to subsidizethe <:xport of s teel by paying a certain amount for eachton sold abroad. How docs this export subsidy affectthe domestic price of steel, the quantity of steel produced,the quantity of steel consunuxS, and the quantityof steel exported? How docs it affect consumersurplus, producer surplus, g·ovemment revenue, andtolal surplus? Is it a good policy from the standpointof oconomic efficiency? (Hint: The analysis of anexport subsidy is similar to the analysis of a tariff.)
Suppose India decides to remove the tariff, show the effect of this change on India’s imports on the graph. Clearly label the new domestic quantity demanded and the quantity supplied. You must use the same graph as you have drawn in answer to Part a to show this new scenario. How does this policy affect consumers, producers, and the government in India? You only have to state who benefits or harms from the policy
a) What is a tariff ? Does a tariff have a result from an import quota? b) Suppose a tariff allowed an industry to create 200,000 jobs paying an average of $22,500 per year. Before the tariff consumers bought 3 billion units (60% imported) at a price of $30. After the tariff they bought 2.75 billion units (none imported) at a price of $36. How much did total consumer spending on the good increase and how much per new job? c) True or False and explain: Free trade allows countries to specialize in producing those goods in which they have the comparative advantage, which in turn, results in increased world production and income.