Consider a small country that exports biomedical goods. Let us suppose that the government, with the intention of promoting export, selling abroad by paying an amount for each unit. How is this subsidy applied to the price of biomedical goods?
Consider a small country that exports biomedical goods. Let us suppose that the government, with the...
Consider a small country that exports biomedical goods. Suppose that the government, with the intention of promoting export, submissies the sale abroad by paying an amount for each unit. How does this subsidy affect the domestic price of biomedical goods?
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. Demand Supply Triangle Polygon Price of Steel (Dollars per ton) 600 500 700 000 000 1993 100 200 Suppose that a "pro-trade government...
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.Because this country exports steel, the world price is represented byP .Suppose that a “pro-trade” government decides to subsidize the export of steel by paying...
Suppose the aggregate demand for honey in a small country is given by Q^D = 100 − P and the aggregate supply is Q^S = P. The international price of honey is P^I = 60, and the world market is willing to buy or sell any amount at that price. Let all quantities be given in gallons and all prices in dollars per gallon. Suppose the country initially starts out with closed borders, and cannot import or export at all....
After experimenting with an export subsidy for a couple of years, the Government of Home country realizes that the Government revenue annual decrease of $1,600 is not sustainable in the long run. Assume that Home still faces a world price of $100 per ton an Home growers of wheat still export 20 tons (see Fig. 4). However, starting year 3, the Government replaces the Export subsidy with a Production Subsidy. Using Fig. 4, answer the following questions: 1. What is...
(11)How is it possible for a country to import more goods than it exports? The government can subsidize imports. The government can subsidize exports. Foreigners can lend the country money. Private domestic banks can lend the country money. (12)The nominal foreign exchange rate is the value of foreign goods in the domestic currency. the value of domestic goods in the foreign currency.the rate at which one currency is traded for another. the difference between what a good costs in the domestic...
Suppose Home is a small exporter of wheat. At the world price of $100 per ton, Home growers export 20 tons. Now suppose the Home government decides to support its domestic producer with an export subsidy of $40 per ton. Use the figure below to answer the following questions. (a) What is the quantity exported under free trade with the export subsidy? How does this effect the figure? (b) Calculate the effect of the export subsidy on consumer surplus, producer...
Suppose that a country has the following data on international transactions in a given year: Exports of goods and services: $1000 Imports of goods and services: $800 Net change in assets owned abroad: $500 Net change in foreign-owned assets at home: $ 400 Unilateral transfers received: $ 0 Unilateral transfers paid: $200 Investment income paid to foreigners: $300 Investment income received from foreigners: $ 400 Then its balance on current account for that year is +200 +100 0 -100 Question...
Suppose a small country producing cars (C) and food (F) is closed to free trade. Its production possibilities frontier (PPF) reflects increasing costs (it’s bowed out). Finally, preferences in this country are such that consumers like both goods equally: U(DC , DF ) = D 1 2 CD 1 2 F . (a) Using graphs, show the autarky equilibrium in this country. Show both (i) a graph of the PPF and indifference curve, and (ii) a graph of relative demand...
True or False, only answer part c is fine 3. (8 points) Consider a small open economy in the Specific-Factors model with 2 goods (C and F) and three factors (mobile labor, fixed capital in C, and fixed land in F). Except otherwise noted, assume that every factor has the same preferences for C and F. Under free trade, the economy exports F. (a) As the home country opens up from autarky to trade, the opportunity cost of F in...