MACROECONOMICS-W/MINDTAP
15th Edition
ISBN: 9781305361409
Author: Gwartney
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 18, Problem 7CQ
To determine
The impact of high tariff on steel import on the employment of Country A’s auto industry.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
China placed tariffs on the importation of US soybeans. Assume that the domestic market for soybeans in China is described by the following equations:
Demand: P = 11.5 – Q Supply: P = 5.5 + Q
Price is in 10 Yuan (¥) per bushel of soybeans and the units for Quantity are 100 million bushels per year. This is to make graphing simpler. This does NOT mean that the price is 10 and quantity is 100. Rather it means that if the price was 40¥ and the quantity was 7,500,000,000 bushels, this would plot as 4 and 7.5 respectively.
The world price for soybeans is ¥65/bushel (this would graph as a horizontal line at 6.5).
Graph the soybean market in China showing equilibrium both with no barriers to trade and with a ¥15/bushel tariff. Be sure to fully and clearly label the graph including: Domestic Demand curve (D), Domestic Supply curve (S), the World Price (WP), and the Price with tariffs (PT), along with the quantities imported both with and without the tariff.
Based on your graph, what…
GlobalCell is an American firm producing cell phones. GlobalCell imports cell phone components from Japan and assembles them domestically. Suppose
that in the United States, a cell phone sells for $100 and that 60% of the cell phone's value comes from the value of the imported components. The United
States imposes a 30% tariff on cell phones and a 10% tariff on the cell phone's components. Assume that costs of producing components are the same in the
United States and Japan and that transit costs are nonexistent.
Based on the information provided, the effective rate of protection that GlobalCell receives from the tariff is
A. 60%
B. -20%
C. -13.3%
D. 26.7%
Potato SA's head of marketing Willie Jacobs has explained that the practice of potato dumping holds some harmful consequences. These include further economic decline and hitting where it hurts most, the livelihoods of South African farmers and workers and their families. He added that irregular imports are detrimental to a viable local economy; hence the implementation of consistent anti-dumping measures is essential." If demand theory is used to explain why South African farmers feel their businesses are under threat, it is because they believe that... A. They would have to sell their produce at a low price resulting in losses. B. They are expecting prices to rise in the future. C. There is not enough demand for potatoes in the market. D. The dumped potatoes shift the supply curve outwards resulting in price that is too high for consumers to afford.
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Only typed answerarrow_forwardIn 2019, Japan had a tariff on canola oil imports from Canada of 13.2 yen per kg. This same year, Japan imported approximately 35 million kg of canola oil from Canada. How much tariff revenue did the Japanese government generate in 2019? (Do not include the extra zeros for millions in your answer.)arrow_forwardSuppose that the world price of oil is roughly $90.00 per barrel and that the world demand and total world supply of oil equal 34 billion barrels per year (bb/yr), with a competitive supply of 20 bb/yr and 14 bb/yr from OPEC. Statistical studies have shown that the long-run price elasticity of demand for oil is -0.40, and the long-run competitive price elasticity of supply is 0.40. Using this information, derive linear demand and competitive supply curves for oil. Let the demand curve be of the general form Q=a-bP and the competitive supply curve be of the general form Q=c+dP, where a, b, c, and d are constants. The equation for the long-run demand curve is A.Q=47.50-0.15P. B.Q=13.50-47.50P. C.Q=47.50-P. D.Q=47.50+0.15P. E.Q=13.50-0.15P.arrow_forward
- The opening statement on the website of the Organization of Petroleum Exporting Countries (OPEC) says its members seek “ … to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.” To achieve these goals, OPEC attempts to coordinate and unify petroleum policies by raising or lowering its members’ collective oil production. However, increased production by the United States, Russia, Oman, Mexico, Norway, and other non-OPEC countries has placed downward pressure on the price of crude oil. Please explain: To achieve these goals of stable and fair oil prices, what must OPEC do to maintain the price of oil at its desired level? How easy is it for OPEC to achieve this goal?arrow_forwardSuppose there are 2 countries that have the following supply and demand equations in autarky Country A Demand: Q = 80 - 4P Supply: Q = 2P - 4 Country B Demand: Q = 32 - 2P Supply: Q = 8P - 8 a) Given the information above which country would be the importer? (Enter A, B) b)What would be the Free Trade Price? c)What would be the Free Trade quantity traded? d) If the importing country imposes a tariff equal to $2 per unit, what would be the new price in the importing country?arrow_forwardWhat impact would a tariff on Chinese goods have on the consumer? How about producersarrow_forward
- Suppose Japan agreed to a voluntary export restriction (VER) that reduced U.S. imports of Japanese steel by 10 percent. What would be the likely short-run effects of that VER on the U.S. and Japanese steel industries? If this restriction were permanent, what would be its long-run effects in the two nations on (a) the allocation of resources, (b) the volume of employment, (c ) the price level, and (d ) the standard of living?arrow_forwardThe cost of producing cars in Canada is $30,000, while the cost of producing cars in Mexico is $22,000, while in the U.S. it costs $18,000. Canada currently imposes a 50% tariff on all automobile imports. a) If Canada enters into a customs union with Mexico, will this lead to trade diversion or trade creation? b) If the tariff rate was originally 100%, would Canada entering into a customs union with Mexico lead to trade diversion or trade creation? c) If the tariff rate was originally 100%, and the cost of producing cars in the U.S. was $12,000, would Canada entering into a customs union with Mexico lead to trade diversion or trade creation?arrow_forwardPROBLEM (6) (Optimal tariff setting without the small country assumption) US demand and supply for wheat are Q = 120-p and Q = p respectively. The rest of the world ROW demand and supply for wheat are Q = 240 - 4p and Q = 2p respectively. Suppose the US is imposing $t (per unit) tariff for imports from the rest of the world. What should the tarifft be, in order to maximize Tariff Revenues?arrow_forward
- do fast.arrow_forwardConsider that the current world price for copper ore is $5.20 per pound. Suppose the domestic market for copper ore in Chile is described by the following demand and supply equations, respectively: P = 8.80 -0.015Q and P = 0.8 +0.025Q, where P is the price per pound, measured in dollars, and Q is the quantity measured in thousands of pounds per month. Similarly, suppose that the domestic market for copper ore in Japan is described by the following demand and supply equations: P = 6.80 -0.02Q and P = 0.8 +0.04Q, where P is the price per pound, measured in dollars, and Q is the quantity measured in thousands of pounds per month. (Question 7 of 8) After receiving requests from lobbyists and domestic producers, the government of the importing country imposes a tariff of $0.30 in the market for copper ore. As a result of the government's policy, what is the change in the government's revenue in the importing country? (report your answer at 2 decimal places)arrow_forwardSteel is produced only in the US and the rest of the world (ROW). The inverse demand and supply in the US are p = 110 - Q8 and p = 20 + Qỗ, while in the ROW, they are p = 70 - Q and p = Qk. All quantities are in millions of tons and all prices are in dollars per ton. Since steel is produced more cheaply in the ROW, the US imports it from the ROW under international trade. At any price, p, the imports of the US, QM. is the excess demand for steel given by the difference between the quantity demanded and the quantity supplied domestically in the US: QM = Q% - Qi. Similarly, the exports of the ROw, QF, is the excess supply of steel given by the difference between how much they produce and how much they demand: QE = Qk - Qg. (b) Find the consumer and producer surplus in the US at the price p". consumer surplus $ million producer surplus million (c) The US government imposes a tax of $12 per unit on the ROw's exports. Find the new world equilibrium price, p**, and new world equilibrium…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education