Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506893
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 16, Problem 14CQ
To determine
The impact of quota determined domestic
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Under what conditions could an import quota and a tariff have exactly the same effect on price and bring the same gains and losses (given a tariff level that restricts imports just as much as the quota would)?
Under what conditions could an import quota and a tariff have have exactly the same effect on price and bring the same gain and losses ( given a tariff level that restricts imports just as much as the quota would)?
A small country is considering imposing a tariff on imported wine at the rate of $5 per bottle. Economists have estimated the following based on this tariff amount:
World price of wine (free trade): $20 per bottle
Domestic production (free trade): 500,000 bottles
Domestic production (after tariff): 600,000 bottles
Domestic consumption (free trade): 750,000 bottles
Domestic consumption (after tariff): 650,000 bottles
Draw a demand and supply curve for the country’s wine market to show the effects of the tariff.
Find the change in consumer surplus, producer surplus, and government revenue resulting from the tariff.
Chapter 16 Solutions
Microeconomics: Private and Public Choice (MindTap Course List)
Knowledge Booster
Similar questions
Explain why a quota may result in lower total surplus in the home country than a tariff, even if they have the same effect on imports and the domestic price.
arrow_forward
No written by hand solution
Which of the following is among the ways a quota can be rationed by a government?
A. Government gives the quota licenses free to domestic importers/producers.
B. Voluntary Export Restraint - the government gives the quota licenses for free to foreigners.
C. All of the answers are possible ways quotas can be rationed
D. Government auctions the quota licenses.
arrow_forward
Consider a small country where the domestic market for sandals is described by the following demand and supply equations, respectively: P = 100 – (1/3)Q and P = 20 + (1/2)Q where P represents the price of a pair of sandals and Q represents the quantity of sandals. The world price for a pair of sandals is $60. Therefore the gains from trade would be
arrow_forward
Recommended textbooks for you
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning