Microeconomics (7th Edition)
Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 9, Problem 9.5.10PA
To determine

Protectionism policy of the Economy towards the imports.

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In the chapter, we described a situation where dumping occurs between two symmetric countries. Briefly describe how things would change if the two countries had different sizes. a. How would the number of firms competing in a particular market affect the likelihood that an exporter to that market would be accused of dumping? (Assume that the likelihood of a dumping accusation is related to the firm's price difference between its domestic price and its export price: the higher the price difference, the more likely the dumping accusation.) As the number of firms competing in a particular market increases, the price charged by exporters (and domestic firms) will fall, increasing the probability that a dumping charge will be filed. b. Would a firm from a large country be more or less likely to be accused of dumping when it exports to a small country (relative to a firm from the small country exporting to the large country)? A firm exporting from a large country to a small country will be…
The graph attached shows the car market in Mexico when Mexico places no restriction on the quantity of cars imported. The world price of a car is $10,000. If the government of Mexico introduces a $2,000 tari_ on car imports, what will be the price of a car in Mexico, the quantity of cars produced in Mexico, the quantity imported into Mexico, and the government's tari_ revenue? If the government of Mexico introduces an import quota of 4 million cars a year, what will be the price of a car in Mexico, the quantity of cars produced in Mexico, and the quantity imported? What argument might be used to encourage the government of Mexico to introduce a $2,000 tariff on car imports from the United States? Who will gain and who will lose as a result of Mexico’s tariff?
List and briefly describe the principal restrictions that may be applied to a nation’s imports.
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