![Microeconomics (7th Edition)](https://www.bartleby.com/isbn_cover_images/9780134737508/9780134737508_largeCoverImage.gif)
Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 9.5.4PA
To determine
Dumping and its effects and need for tariff.
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Students have asked these similar questions
In March 2002, then-President George W. Bush put a tariff on imported steel as a means of protecting the domestic steel industry. In February, before the tariff went into effect, the United States produced 7.4 million metric tons of crude steel and imported about 2.8 million metric tons of steel products at an average price of $363 per metric ton. Two months later, after the tariff was in effect, U.S. production increased to 7.9 million metric tons. The volume of imported steel fell to about 1.7 million metric tons, but the price of the imported steel rose to about $448 per metric ton. The supply and demand diagram below shows this situation (along with an estimated no-trade domestic equilibrium at a price of $625 per metric ton and a quantity of 8.9 million metric tons).
Using the letters, determine which areas on the graph represent each of the following:a. The increase in producer surplus gained by U.S. steel producers as a result of the tariffb. The loss in consumer surplus…
8. Problems and Applications Q8
Suppose the nation of Isoland is an importer of textiles and is looking for a way to raise government revenue. The following graph shows the effect of
a tariff on textile imports.
Supply
Demand
3.
3.
Quantty of Tedies
Price of Textiles
Hômework (Ch 09)
Show the effects of the $200 tariff on the following graph.
Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green points (triangle symbols) to show the consumer surplus
with the tariff and the purple triangle (diamond symbols) to show the producer surplus with the tariff. Lastly, use the orange quadrilateral (square
symbols) to shade the area representing government revenue received from the tariff and the tan points (rectangle symbols) to shade the areas
representing deadweight loss (DWL) caused by the tariff.
1200
Domestic Demand
Domestic Supply
1100
World Price Plus Tariff
1000
900
CS
800
700
PS
600
500
Pw
400
Government Revenue
300
200
140
160
180
200
DWL
20
40
60
80
100
120
QUANTITY (Tons of soybeans)
PRICE (Dollars per ton)
Chapter 9 Solutions
Microeconomics (7th Edition)
Ch. 9 - Prob. 9.1.1RQCh. 9 - Prob. 9.1.2RQCh. 9 - Prob. 9.1.3PACh. 9 - Prob. 9.1.4PACh. 9 - Prob. 9.1.5PACh. 9 - Prob. 9.2.1RQCh. 9 - Prob. 9.2.2RQCh. 9 - Prob. 9.2.3PACh. 9 - Prob. 9.2.4PACh. 9 - Prob. 9.2.5PA
Ch. 9 - Prob. 9.2.6PACh. 9 - Prob. 9.2.7PACh. 9 - Prob. 9.2.8PACh. 9 - Prob. 9.2.9PACh. 9 - Prob. 9.3.1RQCh. 9 - Prob. 9.3.2RQCh. 9 - Prob. 9.3.3RQCh. 9 - Prob. 9.3.4RQCh. 9 - Prob. 9.3.5PACh. 9 - Prob. 9.3.6PACh. 9 - Prob. 9.3.7PACh. 9 - Prob. 9.3.8PACh. 9 - Prob. 9.3.9PACh. 9 - Prob. 9.3.10PACh. 9 - Prob. 9.3.11PACh. 9 - Prob. 9.3.12PACh. 9 - Prob. 9.3.13PACh. 9 - Prob. 9.3.14PACh. 9 - Prob. 9.4.1RQCh. 9 - Prob. 9.4.2RQCh. 9 - Prob. 9.4.3PACh. 9 - Prob. 9.4.4PACh. 9 - Prob. 9.4.5PACh. 9 - Prob. 9.4.6PACh. 9 - Prob. 9.4.7PACh. 9 - Prob. 9.4.8PACh. 9 - Prob. 9.4.9PACh. 9 - Prob. 9.4.10PACh. 9 - Prob. 9.4.11PACh. 9 - Prob. 9.4.12PACh. 9 - Prob. 9.4.13PACh. 9 - Prob. 9.4.14PACh. 9 - Prob. 9.5.1RQCh. 9 - Prob. 9.5.2RQCh. 9 - Prob. 9.5.3RQCh. 9 - Prob. 9.5.4PACh. 9 - Prob. 9.5.5PACh. 9 - Prob. 9.5.6PACh. 9 - Prob. 9.5.7PACh. 9 - Prob. 9.5.8PACh. 9 - Prob. 9.5.9PACh. 9 - Prob. 9.5.10PACh. 9 - Prob. 9.1CTECh. 9 - Prob. 9.2CTECh. 9 - Prob. 9.3CTE
Knowledge Booster
Similar questions
- CH82: A free trade agreement is: O a group of countries agreeing to eliminate barriers to trade between themselves but keeping their own individual tariffs in place against the rest of the world. O a group of countries that eliminates trade barriers among themselves and erects a common tariff against all other nations. O a group of countries that agrees to eliminate customs fees and containerized shipping charges on goods traded among them. a group of countries that agrees there will be "no rules" about trade-anything goes.arrow_forwardSuppose the nation of Isoland is an importer of textiles and is looking for a way to raise government revenue. The following graph shows the effect of a tariff on textile imports. Supply Pw+T F Demand Pw Os 1 Os2 O.1 Quantity of Textiles Price of Textilesarrow_forwardExplain why high tariffs have a negative impact on a country's economy.arrow_forward
- The figure below shows the hypothetical domestic supply and demand for baseball caps in the country of Spain. Domestic Supply and Demand for Baseball Caps Spain 10 9. Customize and control Google Chrome 8. 7 6. 4 2 1 Da 10 20 30 40 50 60 70 80 90 100 Baseball caps (thousands per month) Suppose that the world price of baseball caps is €3 and there are no import restrictions on this product. Assume that Spanish consumers are indifferent between domestic and imported baseball caps. Instructions: Enter your answers as whole numbers. a. What quantity of baseball caps will domestic suppliers supply to domestic consumers? thousand b. What quantity of baseball caps will be imported? thousand Now suppose a tariff of €1 is levied against each imported baseball cap. c. After the tariff is implemented, what quantity of baseball caps will domestic suppliers supply to domestic consumers? thousand d. After the tariff is implemented, what quantity of baseball caps will be imported? thousand Price (€…arrow_forwardDumping refers to the idea of selling goods for below their cost of production. Briefly explain the two scenarios why foreign firms may export a product at less than its cost of production (therefore, earning a negative profit on the good).arrow_forwardSteel Industry Consider a small country that exports steel. Suppose the following graph depicts the domestic demand and supply for steel in this country. One of the two price lines represents the world price of steel. Use the following graph to help you answer the questions below. You will not be graded on any changes made to this graph. 1. Because this country exports steel, the world price is represented by P1 or P2. Suppose that a “pro-trade” government decides to subsidize the export of steel by paying $10 for each ton sold abroad. 2. With this export subsidy, the price paid by domestic consumers is $???? per ton, and the price received by domestic producers is $???? per ton. 3. The quantity of steel consumed by domestic consumers INCREASES or REMAINS UNCHANGED or DECREASES, the quantity of steel produced by domestic producers INCREASES or REMAINS UNCHANGED or DECREASES, and the quantity of steel exported INCREASES or REMAINS UNCHANGED or DECREASES. 4. TRUE or FALSE:…arrow_forward
- Ghana's parliament is debating how to undertake ISI. The debate centres on whether they should impose tariffs on imports or use quotas. Which system is better for consumers? (use a diagram to explain yourself).arrow_forwardResponding to a case brought by the Dillon Corporation, Florida of U.S., for the purpose to expand China paper anti-dumping tariff, the U.S. Commerce Department announced it was imposing a tariff of 99 percent on imported glossy paper from China. Glossy paper is the type of paper used to manufacture art books, high-end magazines, textbooks, and annual reports. In 2016 imports of glossy paper from China was estimated to be $224 million. What is dumping? Who in the U.S. loses from China’s dumping of glossy paper? What argument might Dillon Corporation, have used to persuade the U.S. Commerce Department to impose a 99 percent tariff? Explain who, in the United States, will gain and who will lose from the tariff on glossy paper. How do you expect the prices of magazines and textbooks that you buy to change?arrow_forwardUse the following graph to show the effects of the $200 tariff. Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green points (triangle symbols) to show the consumer surplus with the tariff and the purple triangle (diamond symbols) to show the producer surplus with the tariff. Lastly, use the orange quadrilateral (square symbols) to shade the area representing government revenue received from the tariff and the tan points (rectangle symbols) to shade the areas representing deadweight loss (DWL) caused by the tariff. PRICE (Dollars per ton) 1200 1100 1000 900 800 700 600 500 400 300 200 Domestic Demand 0 20 40 Domestic Supply 60 80 100 120 140 QUANTITY (Tons of wheat) 160 P -0 W 180 200 World Price Plus Tariff CS PS Government Revenue DWL ?arrow_forward
- Consider two countries, Home and Foreign. In the figure below, the import demand ("IDHome") curve depicts Home's demand for Foreign's flash drives, and the import supply curve ("ISForeign") depicts Foreign's supply of flash drives to Home. Assume Home is a "large" country that levies a tariff against Foreign imports of flash drives, thereby shifting the relevant supply curve from ISForeign to ISForeign +t. For the following questions, please refer to the figure below. P $30 28 26 24 22 20 18 16 15-- 14 12 10 8 6 4 2 0 2 4 ISForeign +t 6 8 10 12 14 16 18 20 22 22 24 26 28 ISForeign IDHome 30 Q With free trade, Home's consumer surplus equals $112.50 and Foreign's producer surplus equals $112.50. With a tariff of $ 12 per flash drive, Home's consumer surplus equals $72, Foreign's producer surplus equals $ 36, Home's tariff revenue equals $72, and Home's deadweight loss equals $45. Of the Home's tariff revenue, $36 comes from Foreign's producers, and the rest comes from Home's consumers.…arrow_forwardSuppose Zambia is open to free trade in the world market for soybeans. Since Zambia is small relative to the international market, the demand for and supply of soybeans in Zambia have no impact on the world price. The following graph shows the domestic market for soybeans in Zambia. The world price of a ton of soybeans is P - $250. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). ? PRICE (Dollars per ton) 460 Domestic Demand 430 400 370 340 310 200 250 220 190 160 0 25 50 Domestic Supply 75 100 125 150 175 200 225 250 QUANTITY (Tons of soybeans) 75 100 125 150 175 200 225 250 QUANTITY (Tons of soybeans) PS Because Zambia participates in international trade in the market for soybeans, it will import Now suppose the Zambian government decides to impose a tariff of $30…arrow_forwardIn reference to tariffs, What is the reason that U.S. imposes tariffs? why the U.S. imposes tariffs on imports?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337617406/9781337617406_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337617390/9781337617390_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337617383/9781337617383_smallCoverImage.gif)
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337613040/9781337613040_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337613064/9781337613064_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337111522/9781337111522_smallCoverImage.gif)