Microeconomics: Private and Public Choice (MindTap Course List)
15th Edition
ISBN: 9781285453569
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 8CQ
(a)
To determine
The purchase of Country A’s products instead of imported products and the economic impact.
(b)
To determine
The purchase of domestic products instead of imported economic impact in State C .
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
American firms outsource many jobs to other, lower cost countries. How can this outsourcing actually lead to increased employment here in the USA?
How can there be any economic gains for a country from both importing and exporting the same good, like cars?
The parliament of Ghana is debating whether import substitution should take the form of quotas or tariffs. You are asked to brief them on the difference between the two. A representative from Ghana's National Labour Party is particularly worried about consumers? Which policy (tariffs or quotas) is better for consumers?
At one time, it was believed that the way for a nation to prosper was to export as much as possible while importing as little as possible. More money would flow into a country than out of a country. Is this really a sound economic strategy? What is the relationship between exports and imports?
Chapter 16 Solutions
Microeconomics: Private and Public Choice (MindTap Course List)
Knowledge Booster
Similar questions
- Suppose the U.S. government increases trade barriers on Japanese cars coming into the United States. a. What impact would this have on the American car market? What about the impact on American automotive workers? (Hint: think in terms of demand and supply analysis). b. What impact would this have on the Japanese car market in the United States? c. Who benefits and who loses from the higher trade barriers imposed on Japanese cars coming into the United States? d. What could motivate the government to pursue these stricter entry barriers on Japanese cars?arrow_forwardThere are two countries Home and Foreign. Home has 1,200 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is 2. Foreign has a labor force of 800, Foreign's unit labor requirement in apple production is 5, while in banana production it is 1. Suppose world relative demand takes the following form. Demand for apples/demand for bananas price of bananas/price of apples 1.) Using the 3-point curved line drawing tool, draw the relative demand curve on the graph to the night. Label the curve RD. Now suppose that instead of 1.200 workers, Home had 2,400. The relative supply curve (RS) would shift to the right (as shown by RS,) 2) Using the point drawing tool, indicate the new equilibrium relative price of apples, Label this point EQ. Carefully follow the instructions above and only draw the required objects. What can you say about the efficiency of world production and the division of the…arrow_forwardThere are two countries Home and Foreign. Home has 1,200 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is 2. Foreign has a labor force of 800. Foreign's unit labor requirement in apple production is 5, while in banana production it is 1. Suppose world relative demand takes the following form: Demand for apples/demand for bananas = price of bananas/price of apples. 1.) Using the 3-point curved line drawing tool, draw the relative demand curve on the graph to the right. Label the curve RD. Now suppose that instead of 1,200 workers, Home had 2,400. The relative supply curve (RS) would shift to the right (as shown by RS₁). 2.) Using the point drawing tool, indicate the new equilibrium relative price of apples. Label this point EQ. Carefully follow the instructions above and only draw the required objects. What can you say about the efficiency of world production and the division of…arrow_forward
- There are two countries Home and Foreign. Home has 1,200 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is 2. Foreign has a labor force of 800. Foreign's unit labor requirement in apple production is 5, while in banana production it is 1. Suppose world relative demand takes the following form: Demand for apples/demand for bananas = price of bananas/price of apples a-b. On the graph to the right: 1.) Using the 3-point curved line drawing tool, draw the relative demand curve. Label the curve RD. 2) Using the point drawing tool, indicate the equilibrium relative price of apples. Label this point EQ. Carefully follow the instructions above and only draw the required objects. 2 Relative price of apples Pa/Pb 0 035 0.75 05 Relative quantity of apples RSarrow_forwardInternational Trade (Chapter 20) QUESTIONS Suppose that in the absence of trade, the U.S. price for bicycles was higher than the world price for bicycles. Would allowing international trade, mean that the U.S. would import or export bicycles? Who in the U.S. would benefit and who would lose with a free trade policy, and would the gains be greater than the losses? Note: please do not give a copy & paste answer from Chegg. or course heroarrow_forwardIf the country specialize in and agreed to trade 100 car parts for 100 aircraft parts, show on the graphs the gain that each country receives from trade and what are the characteristics about the price and allows for gains from trade? arrow_forward
- help mearrow_forwardPart 4-Stretch Your Thinking- Read the 1978 Milton Friedman quote regarding the accusation that Japan was unfairly selling the US cheap steel then answer the questions. "Let us suppose, for a moment, that the Japanese flood us with steel. That will reduce employment in the American steel industry, no doubt. However, it will increase employment elsewhere in America. We will pay for that steel with dollars. What will the Japanese do with the dollars they get for the steel? They aren't going to burn them. They aren't going to tear them up. If they would, that would be best of all, because there's nothing we can produce more cheaply than green pieces of paper. And if they were willing to send us steel, and just take back green pieces of paper, I can't imagine a better deal!" 16. Identify who benefited and who was harmed by low cost foreign imports from Japan. 17. What did the Japanese most likely do with the money that was used to buy their steel? 18. What likely happened to the US capital…arrow_forwardWhat are the sources of Hong Kong's comparative advantage? Explain.arrow_forward
- 23. What happens to the relative price of a good as a result of trade if there is an increasing return to scale in the industry producing the good. Is it still converging to a price between domestic and foreign price of the good? Draw a graph to answer.arrow_forwardSuppose two countries, A and B, trade two goods, Good 1 and Good 2. Production of both goods requires capital (K) and labor (L) and production of one unit of Good 1 requires more capital relative to labor than production of one unit of Good 2. We also know that ΚΑ > KB, where upper bars denote the total amount of a factor in a country. LB LA State the Heckscher-Ohlin theorem. What does it predict about trade patterns between countries A and B once they open up for trade? ii. Using a production possibility frontier and an indifference curve, draw a diagram that shows no-trade and free-trade equilibrium in country A.arrow_forwardwhat factors have helped the united states to become the world's leading exporter of movies, books and popular music?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage LearningMacroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage LearningMicroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher: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