Welfare impact of a quota for a small country Pd Ри A Q₁ BICID Q₂ Q₂ S Q4 Loss in consumer surplus: Gain in producer surplus: Gain in quota rents: Net loss (deadweight loss):
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- Please no written by hand solution Which of the following statements is not generally true of a production quota? a. The market will not clear due to the excess supply of that good. b. Consumer surplus increases when compared to the market before the quota. c. Producer surplus may increase or decrease. d. Some of the consumer surplus will be transferred to producersSuppose 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. Explain why consumer and producer surplus can be used to gauge the change in welfare caused by the export subsidy on individuals and firms.Consider the price support and the quota, Calculate The consumer surplus The producer surplus The deadweight loss
- 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.Explain why consumer and producer surplus can be used to gauge the change in welfare caused by the export subsidy on individuals and firms.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?
- Suppose now the government decides to increase the number of quotas available to 72 units, but it keeps the price support at the current level of $72. Calculate (I) the consumer surplus (ii) the producer surplus (iii) deadweight loss (iv) Which of the two options would be preferred by the producers (v) Which of the two options would be preferred by society as a whole.Suppose demand and supply for services of surgeons in Australia each day are given below, where demand and supply are expressed in terms of number of services per day, and P = price per service Qd=2000−2P Qs=3P What area(s) comprise the producer surplus after the implementation of the production quota? (select all relevant areas) a) D b) F c) B d) E e) C f) ARefer to above Figure. Suppose the free-trade price is $85. Also, assume an export subsidy of $10. Calculate the total cost to the government for the export subsidy. $10,000 $14,000 $5,000 $19,000.
- calculate the following: change in consumer surplus, change in producer surplus, change in government revenue, consumer distortion, trade gain/loss, and net change in welfare. given that there is a tariff imposed of $5. export supply curve, Qex=3P-75 and import demand curve, Qim=15-P._____ means selling the products at a price less than the ongoing price in the market. a. Quota b. Subsidy c. Dumping d. TariffThe world price of cotton is below the no-trade price in Country X and above the no-trade price in country Y. Using supply and demand diagrams, show and compare the gains from trade in each country. The market for pizza is characterized by a downward-sloping demand curve and an upward-sloping supply curve. Draw the competitive market equilibrium. Label the price, quantity, consumer and producer surplus. Is there any deadweight loss? Explain. Suppose that the government forces each pizza house to pay a Php2 tax on each pizza sold. Illustrate the effect of this tax on the pizza market. Label the consumer surplus, producer surplus, government revenue, and deadweight loss. How does each area compare to the pre-tax case?