EBK MICROECONOMICS
12th Edition
ISBN: 9780100659452
Author: PARKIN
Publisher: YUZU
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Chapter 7, Problem 21APA
To determine
The impact of imposingan import quota by the government.
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What would be the effects of imposing a quota on imported cars from Japan? Explain the effects for the American consumers and producers.
Suppose the United States producers of rice convince the government to place a quota on (or to restrict entirely) the import.
a. What is the effect on U.S. producers of rice?
b. What is the effect on U.S. consumers of rice?
c. What is the effect on the foreign producers of rice?
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…
Chapter 7 Solutions
EBK MICROECONOMICS
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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- The figure below shows the U.S. market for imported wine. For simplicity, we consider export supply curves to be flat. Chilean wine is available for $480 per barrel and French wine is available for $420 per barrel. Price per barrel $500 $480 $420 10 a. $480 b. $560 C. $500 d. $420 15 a Chilean price French price US demand for imported wine Quantity (millions of barrels per year) Suppose the United States has a tariff of $80 per barrel on imported wine. Then, the United States joins a free-trade area with Chile. At what price per barrel will the imported wines be purchased by the U.S. consumers?arrow_forwardUnder 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)?arrow_forwardLesson 12 Question 6arrow_forward
- Recently the U.S. government filed a complaint with the World Trade Organization (WTO) that the Spanish government was subsidizing exports of ripe olives, which are used as an ingredient in other products, such as olive oil. In the U.S., who benefits from the Spanish subsidy of ripe olives to the U.S.? U.S. government imposes a countervaliling duty (tariff) on imports of ripe olives, who benefits? O producrersof ripe olives; producers of olive oil O producers of olive oil; producers of ripe olives O producers of olive oil; producers of olive oil O producers of ripe olives; producers of ripe olives If thearrow_forwardThe year is 2005. For many years the US has restricted textile imports from China using quotas. Now under WTO the US is having to eliminate the quotas and allow china to export textiles to the US free of quotas. Use the principles of demand and supply to analyze the effect of this action on: the US textile industry, the US textile consumers, the textile industry of Vietnam (another textile producing country) that has been exporting textile to the US without quotas. Remember to tell us: who gains, and who loses in each case.arrow_forwardH3.arrow_forward
- Brazil is an importer of computer chips. When the Brazilian government imposes an import quota on computer chips, consumer surplus decreases, total surplus increases in the Brazilian computer chip market. consumer surplus increases, total surplus decreases in the Brazilian computer chip market. consumer surplus decreases, total surplus decreases in the Brazilian computer chip market. consumer surplus increases, total surplus increases in the Brazilian computer chip market. O O Oarrow_forwardExplain how a US QUOTA on foreign dairy would affect each group in the economy. Use the picture below to answer the question, each word is only used once.arrow_forwardQUESTION 12 Mexico is an importer of rice. The world price of a kilo of rice is $10. Mexico imposes a $2-per-kilo tariff on rice. Mexico is a price-taker in the rice market. As a result of the tariff, Mexican consumers of rice become worse off and Mexican producers of rice become worse off. Mexican consumers of rice become worse off and Mexican producers of rice become better off. Mexican consumers of rice become better off and Mexican producers of rice become worse off. Mexican consumers of rice become better off and Mexican producers of rice become better off.arrow_forward
- Question 12 One of Morocco's top import goods is wheat. Domestic market demand is described as Qn = 69 – 3P, and domestic producers supply wheat according to the function Qs = (5/6)P, where Q is measured in millions of bushels. The perfectly competitive world price of wheat is $6 per bushel. million bushels of wheat are imported under the competitive world price. Suppose the Moroccan government introduces an import quota equal to 23 million bushels of wheat. The new price is $_ per bushel of wheat. million. You must draw and label a graph that As a result of this import quota, domestic producers gain $. enables the TA to follow all of your intermediate steps. Suppose the Moroccan government wanted to achieve the same outcome (reduce imports to 23 million bushels of wheat) with a tariff instead. Relative to the import quota equilibrium, a tariff would cause market efficiency to _million. You must add on to your existing graph to help (increase/decrease/be the same) by $_ the TA to…arrow_forwardNamibia is contemplating on imposing an export subsidy to encourage its businesses to export more. with the use of the diagram, discuss the effect of such an export sudsidyarrow_forwardThe demand for cameras in a certain country is given by D = 8000 – 30P, where P is the price of acamera. Supply by domestic camera producers is S = 4000 + 10P. If this economy opens to tradewhile the world price of a camera is $50, and the government imposes a tariff of $30 per camera,what will be the quantity of cameras that this country imports or exports?arrow_forward
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