Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 7, Problem 16APA
To determine
Illustrating the market for corn in poor developing countries and indicating the changes in consumer surplus,
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) A country opens up to trade and imports clothing. In the clothing market, surplus has been redistributed from A) consumers to producers. C) government to consumers. 1 B) producers to consumers. D) producers to government.
The import quantity under free trade is 500 crates of bananas and the price is $0.50/lb. The government them imposes an import quota of 400 crates and the new price of bananas is $0.55 within the country but unchanged in the rest of the world.
Because of an import quota, the producers enjoy a gain of 30, the consumers experience a loss of 120. What is the net welfare effect for the economy if the Government gives away the permits for free____, and if the govt auctions them____?
a. Loss of 90, Loss of 70
b. More information is needed
c. Loss of 90, Loss of 90
d. Loss of 70, Loss of 90
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When Venezuela allows free trade of soybeans, the price of a ton of soybeans in Venezuela will be $350. At this price,
tons of soybeans will be demanded in Venezuela, and
tons will be supplied by domestic suppliers. Therefore, Venezuela will export
tons of soybeans.
Using the information from the previous tasks, complete the following table to analyze the welfare effect of allowing free trade.
Without Free Trade
With Free Trade
(Dollars)
(Dollars)
Consumer Surplus
Producer Surplus
When Venezuela allows free trade, the country's consumer surplus
decrease or increase by
, and producer surplus decrease or increase by
. So, the net effect of international trade on Venezuela's total surplus is a loss or gain of
.
Chapter 7 Solutions
Macroeconomics
Ch. 7.1 - Prob. 1RQCh. 7.1 - Prob. 2RQCh. 7.2 - Prob. 1RQCh. 7.2 - Prob. 2RQCh. 7.2 - Prob. 3RQCh. 7.3 - Prob. 1RQCh. 7.3 - Prob. 2RQCh. 7.3 - Prob. 3RQCh. 7.3 - Prob. 4RQCh. 7.3 - Prob. 5RQ
Ch. 7.4 - Prob. 1RQCh. 7.4 - Prob. 2RQCh. 7.4 - Prob. 3RQCh. 7.4 - Prob. 4RQCh. 7.4 - Prob. 5RQCh. 7 - Prob. 1SPACh. 7 - Prob. 2SPACh. 7 - Prob. 3SPACh. 7 - Prob. 4SPACh. 7 - Prob. 5SPACh. 7 - Prob. 6SPACh. 7 - Prob. 7SPACh. 7 - Prob. 8SPACh. 7 - Prob. 9SPACh. 7 - Prob. 10SPACh. 7 - Prob. 11SPACh. 7 - Prob. 12APACh. 7 - Prob. 13APACh. 7 - Prob. 14APACh. 7 - Prob. 15APACh. 7 - Prob. 16APACh. 7 - Prob. 17APACh. 7 - Prob. 18APACh. 7 - Prob. 19APACh. 7 - Prob. 20APACh. 7 - Prob. 21APACh. 7 - Prob. 22APACh. 7 - Prob. 23APACh. 7 - Prob. 24APACh. 7 - Prob. 25APACh. 7 - Prob. 26APACh. 7 - Prob. 27APACh. 7 - Prob. 28APA
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- QUESTION 32 Which of the following statements is false? A. A quota is a tax levied against a specific good being imported into a country B. A tariff is a tax levied on imported goods C. A quota is a limit on the quantity of a good being imported into a country D. A tariff reduces the amount of imported goodsarrow_forwardTwo years ago, the WTO negotiated a package intended to reduce trade barriers. Developed countries agreed to eliminate farm export subsidies. (I exaggerated what actually happened.) Developed countries are net exporters of farm products. As a group, developed countries comprise a large economy. Use appropriate diagrams and an explanation to show the economic welfare effects (i.e., changes in consumer surplus and producer surplus) of this reduction in farm export subsidies on: (a) developed countries (use one graph to represent them). (b) a small developing country which is a net importer of farm products. The small country practices free trade. (c) a small developing country which is a net exporter of farm products. The small country practices free trade.arrow_forwardNew Zealand in one year can raise 75 tons of beef or produce 750 boxes of tulips. In the same growing season, Venezuela can raise 45 tons of beef or produce 650 boxes of tulips. When the two countries begin trading beef for tulips, we expect the total surplus from beef consumption and production to: A) fall in New Zealand B) rise in New Zealand C) stay the same in Venezuela. D) either rise or fall in Venezuela.arrow_forward
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