Task 3. You know the following information about the wine market in Georgia With tariff 30$ 10% 40.000 20.000 Without tariff 30$ World price Tariff rate (ad valorem) Consumption (bottle) Production (bottle) 50.000 10.000 a, Is Georgia a small country or a large country? Why? b, Plot a graph with demand and supply curves and indicate the situation of the domestic market with and without tariffs. c, Suppose that the country decides to liberalize trade in wine and remove the tariff. Do consumers win or lose due to this? Show on the graph and calculate how much they win or lose. d, Do domestic wine producers win or lose due to liberalization? Show on the graph and calculate how much they win or lose. e, Does the government win or lose due to liberalization? Show on the graph and calculate how much it wins or loses. f, What is the net national loss or gain due to liberalization?
Task 3. You know the following information about the wine market in Georgia With tariff 30$ 10% 40.000 20.000 Without tariff 30$ World price Tariff rate (ad valorem) Consumption (bottle) Production (bottle) 50.000 10.000 a, Is Georgia a small country or a large country? Why? b, Plot a graph with demand and supply curves and indicate the situation of the domestic market with and without tariffs. c, Suppose that the country decides to liberalize trade in wine and remove the tariff. Do consumers win or lose due to this? Show on the graph and calculate how much they win or lose. d, Do domestic wine producers win or lose due to liberalization? Show on the graph and calculate how much they win or lose. e, Does the government win or lose due to liberalization? Show on the graph and calculate how much it wins or loses. f, What is the net national loss or gain due to liberalization?
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter3: Interdependence And The Gains Rrom Trade
Section: Chapter Questions
Problem 6PA
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