Bundle: Principles of Microeconomics, Loose-leaf Version, 8th + MindTap Economics, 1 term (6 months) Printed Access Card
8th Edition
ISBN: 9781337379151
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 9, Problem 3CQQ
To determine
The impact of international trade converting a country to importer.
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Draw the supply-and-demand diagram for an importing country. What is consumer surplus and producer surplus before trade is allowed? What is consumer surplus and producer surplus with free trade? What is the change in total surplus?
a) What is a tariff ? Does a tariff have a result from an import quota?
b) Suppose a tariff allowed an industry to create 200,000 jobs paying an average of $22,500 per year. Before the tariff consumers bought 3 billion units (60% imported) at a price of $30. After the tariff they bought 2.75 billion units (none imported) at a price of $36. How much did total consumer spending on the good increase and how much per new job?
c) True or False and explain: Free trade allows countries to specialize in producing those goods in which they have the comparative advantage, which in turn, results in increased world production and income.
Economics
4. Depict on graph and briefly explain economic consequences of export subsidy: • for domestic exporters; • for domestic consumers; • for government budget; • for national economic welfare as a whole.
Chapter 9 Solutions
Bundle: Principles of Microeconomics, Loose-leaf Version, 8th + MindTap Economics, 1 term (6 months) Printed Access Card
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- Explain how a subsidy on agricultural goods like sugar adversely affects the income of foreign producers of imported sugar.arrow_forwardConsider two countries: South Korea and Taiwan. Taiwan can produce one million mobile phones per day at the cost of 10 per phone and South Korea can produce 50 million mobile phones at 5 per phone. Assume these phones are the same type and quality and there is only one price. What is the minimum price at which both countries will engage in trade?arrow_forward
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