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The graph below shows the market for tires in the United States, a nation that is open to international trade but is assumed to be a price taker unable to affect the world price of tires. Market for Tires 320 Tools 280 New Equilibri Qs+ quota 240 S+ Quota 200 160 120 80 (280, 80) 40 40 80 120 160 200 240 280 320 Quantity (millions of tires) a. Using the graph above, at the world price of $80 per tire, how many tires will the United States import? million tires Now suppose the U.S. government imposes a quota as shown in the graph above. b. Using this same graph, indicate the new market equilibrium with the quota imposed and the domestic quantity supplied (Qs). Price (dollars per tire)

The graph below shows the market for tires in the United States, a nation that is open to international trade but is assumed to be a price taker unable to affect the world price of tires. Market for Tires 320 Tools 280 New Equilibri Qs+ quota 240 S+ Quota 200 160 120 80 (280, 80) 40 40 80 120 160 200 240 280 320 Quantity (millions of tires) a. Using the graph above, at the world price of $80 per tire, how many tires will the United States import? million tires Now suppose the U.S. government imposes a quota as shown in the graph above. b. Using this same graph, indicate the new market equilibrium with the quota imposed and the domestic quantity supplied (Qs). Price (dollars per tire)

Macroeconomics: Private and Public Choice (MindTap Course List)
Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter18: Gaining From International Trade
Section: Chapter Questions
Problem 14CQ
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3/25/22, 10:55 PM Assignment Print View 4. The graph below shows the market for tires in the United States, a nation that is open to international trade but is assumed to be a price taker unable to affect the world price of tires. Market for Tires 320 Tools -- 280 New Equilibri Qs+ quota 240 S+ Quota 200 160 120 80 P. (280, 80) 40 40 80 120 160 200 240 280 320 Quantity (millions of tires) a. Using the graph above, at the world price of $80 per tire, how many tires will the United States import? million tires Now suppose the U.S. government imposes a quota as shown in the graph above. b. Using this same graph, indicate the new market equilibrium with the quota imposed and the domestic quantity supplied (Qs). https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=4.&postSubmissionView=13252718327623084&wid=13252718466068729&rol... 1/3 Price (dollars per tire)
Transcribed Image Text:3/25/22, 10:55 PM Assignment Print View 4. The graph below shows the market for tires in the United States, a nation that is open to international trade but is assumed to be a price taker unable to affect the world price of tires. Market for Tires 320 Tools -- 280 New Equilibri Qs+ quota 240 S+ Quota 200 160 120 80 P. (280, 80) 40 40 80 120 160 200 240 280 320 Quantity (millions of tires) a. Using the graph above, at the world price of $80 per tire, how many tires will the United States import? million tires Now suppose the U.S. government imposes a quota as shown in the graph above. b. Using this same graph, indicate the new market equilibrium with the quota imposed and the domestic quantity supplied (Qs). https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=4.&postSubmissionView=13252718327623084&wid=13252718466068729&rol... 1/3 Price (dollars per tire)
3/25/22, 10:55 PM Assignment Print View Instructions: Use the tools provided "New Equilibrium" and "Qs + quota" to indicate the new market price, quantity demanded, and domestic quantity supplied with this quota. c. As a consequence of this quota, how many tires will the United States import now? million tires How many tires will be supplied domestically? million tires Now suppose instead that the U.S. government imposes a quota with the goal of reducing the number of tires imported by 50% (half of the value in part a). d. Using the graph below, indicate the new supply with the quota imposed as well as the new market equilibrium and the domestic quantity supplied (Qs) under the new quota. Instructions: First, drag the "S + Quota" line to the appropriate location. Then use the tools provided "New Equilibrium" and "Qs + quota" to indicate the new market price, quantity demanded, and domestic quantity supplied with this quota. %3D Market for Tires 320 Tools S --O 280 New Equilibriu Qs+ quota 240 200 S+ Quota 160 120 80 P, 40 40 80 120 160 200 240 280 320 Quantity (millions of tires) https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=4.&postSubmissionView=13252718327623084&wid=13252718466068729&rol... 2/3 Price (dollars per tire)
Transcribed Image Text:3/25/22, 10:55 PM Assignment Print View Instructions: Use the tools provided "New Equilibrium" and "Qs + quota" to indicate the new market price, quantity demanded, and domestic quantity supplied with this quota. c. As a consequence of this quota, how many tires will the United States import now? million tires How many tires will be supplied domestically? million tires Now suppose instead that the U.S. government imposes a quota with the goal of reducing the number of tires imported by 50% (half of the value in part a). d. Using the graph below, indicate the new supply with the quota imposed as well as the new market equilibrium and the domestic quantity supplied (Qs) under the new quota. Instructions: First, drag the "S + Quota" line to the appropriate location. Then use the tools provided "New Equilibrium" and "Qs + quota" to indicate the new market price, quantity demanded, and domestic quantity supplied with this quota. %3D Market for Tires 320 Tools S --O 280 New Equilibriu Qs+ quota 240 200 S+ Quota 160 120 80 P, 40 40 80 120 160 200 240 280 320 Quantity (millions of tires) https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=4.&postSubmissionView=13252718327623084&wid=13252718466068729&rol... 2/3 Price (dollars per tire)
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