Homework Answers
7. The correct option would be
- Revenue = $44
The import quota acts same as that of tariff of $1. If the tariff was imposed, then the government revenue would be tariff ($1) times quantity supplied after tariff (84-40 or 44 units), ie $1 times 44 or $44. But, as quota is imposed, this revenue goes to the foreign producers, which amounts to $44.
8. The correct option would be
- inefficient because the MSC of the 400th pound exceeds its MSB.
At 400 units (pounds), the MSC would be more than the MSB, meaning that the MSC exceeds MSB. The opportunity cost associated with the production is included in the marginal private cost, not the social cost. The term social opportunity cost is used to reflect opportunity cost associated with MSC. At 400th units, the MSC exceeds the MSB, and the efficient point would be where MSC equals the MSB.
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27 2$ Refer to the diagram below. Price $13 Domestic Supply 00 $1.00 Tarih ) un...
Figure#1: Domestic Supply Price $13 8 $1.00 Terit 6 World Price 5 2 Domestic Demand 30...
Figure#1: Domestic Supply Price $13 8 $1.00 Terit 6 World Price 5 2 Domestic Demand 30 40 60 84 96 Quantity 1. Refer to Figure #1. (1 Point) After trade opened but without tariff, the domestic price and domestic quantity demanded are a. $5 and 84. (b.S5 and 96. c. $6 and 84. d. $6 and 96. 2. Refer to Figure # 1 . ( 1 Point ) After trade opened with the tariff, the domestic price and domestic quantity...
Suppose the following table reflects the domestic supply and demand for radios: Price $18 $16 $14...
Suppose the following table reflects the domestic supply and demand for radios: Price $18 $16 $14 $12 $10 $8 $6 $4 Qs 8 7 6 5 4 3 2 1 Qd 2 4 6 8 10 12 14 16 Graph these market conditions and identify the equilibrium price and quantity. Now suppose that foreigners enter the market, offering to sell an unlimited supply of radios for $6 a piece. Illustrate and identify the new market price, domestic quantity supplied and...
Please draw the graph The figure below shows the hypothetical domestic supply and demand for baseball...
Please draw the graph
The figure below shows the hypothetical domestic supply and demand for baseball caps in the country of Spain. The world price ls also shown on the graph. Suppose that there are currently no import restrictions on baseball caps and that Spanish consumers are Indifferent between domestic and imported baseball caps. Now suppose that because of intense lobbying by domestic baseball cap manufacturers, the Spanish government decides to impose an import quota of 20,000 basebell caps per...
33. The following diagram shows the domestic demand and supply curves for sunglasses. Assume that...
33. The following diagram shows the domestic demand and supply curves for sunglasses. Assume that the world price for sunglasses is $10 per unit. 60 50 45 40 35 30 20 15 10 200 400 600 800 1000 Part : With no trade allowed, what are the equilibrium price and equilibrium quantity for sunglasses? Part 2: If the country allows free trade, (a) how many sunglasses will domestic consumers demand and how many sunglasses will domestic producers produce? (b) Will...
3. The following diagram shows the domestic demand and supply curves for sunglasses. Assume that the...
3. The following diagram shows the domestic demand and supply curves for sunglasses. Assume that the world price for sunglasses is S10 per unit. 60 50 45 40 35 30 20 15 10 200 400 600 800 1000 Part 1: With no trade allowed, what are the equilibrium price and equilibrium quantity for sunglasses? Part 2: If the country allows free trade, (a) how many sunglasses will domestic consumers demand and how many sunglasses will domestic producers produce? (b) Will...
In Exercise 4 in Chapter 2, we examined a vegetable fiber traded in a competitive world...
In Exercise 4 in Chapter 2, we examined a vegetable fiber traded in a competitive world market and imported into the United States at a world price of $4.00 per pound. U.S. domestic supply and demand for various price levels are shown in the following table. U.S. Supply U.S. Demand Price (million pounds) (million pounds) 2.00 4.00 8.00 22 8.00 10.00 10 1 0 12.00 12 4 18 The demand curve is given by 04. Qp = 40.00 -3.00P. OB....
Suppose that a country imports 2 billion barrels of crude oil per year and domestically produces...
Suppose that a country imports 2 billion barrels of crude oil per year and domestically produces another 4 billion barrels of crude oil per year. All the domestic production is consumed by domestic consumers (i.e. there are no exportations). The world price of crude oil is $80 per barrel. Assuming linear demand and supply schedules, economists estimate the price elasticity of domestic supply to be 0.3 and the price elasticity of domestic demand to be -0.15 at the current equilibrium....
25. Too few resources are devoted to the creation of knowledge because profit-seeking firms A) B) C) D) undervalue...
25. Too few resources are devoted to the creation of knowledge because profit-seeking firms A) B) C) D) undervalue knowledge in their pursuit of revenues. abuse their patents. tend to free-ride on the knowledge that others have developed. tend to rely on existing employee knowledge. 26. If policymakers use a pollution tax to control pollution, the tax per unit of pollution should be set A) B) equal to the marginal external cost at the economically efficient level of pollution. equal...
(1) If the world price is above the domestic equilibrium price, the domestic country is likely...
(1)
If the world price is above the domestic equilibrium price, the
domestic country is likely to ____________________ the good.
(2)
The difference between what an economy sells to and buys from
foreigners is _________________.
(3)
The idea that exchange rates and prices adjust to equalize the
cost of living across international boundaries is called
__________________________.
(4)
In the graph below, when the world price is $3, how many units
are...
Chapter overview 1. Reasons for international trade Resources reasons Economic reasons Other reasons 2. Difference between...
Chapter overview 1. Reasons for international trade Resources reasons Economic reasons Other reasons 2. Difference between international trade and domestic trade More complex context More difficult and risky Higher management skills required 3. Basic concept s relating to international trade Visible trade & invisible trade Favorable trade & unfavorable trade General trade system & special trade system Volume of international trade & quantum of international trade Commodity composition of international trade Geographical composition of international trade Degree / ratio of...
Figure#1: Domestic Supply Price $13 8 $1.00 Terit 6 World Price 5 2 Domestic Demand 30 40 60 84 96 Quantity 1. Refer to Figure #1. (1 Point) After trade opened but without tariff, the domestic price and domestic quantity demanded are a. $5 and 84. (b.S5 and 96. c. $6 and 84. d. $6 and 96. 2. Refer to Figure # 1 . ( 1 Point ) After trade opened with the tariff, the domestic price and domestic quantity...
Please draw the graph
The figure below shows the hypothetical domestic supply and demand for baseball caps in the country of Spain. The world price ls also shown on the graph. Suppose that there are currently no import restrictions on baseball caps and that Spanish consumers are Indifferent between domestic and imported baseball caps. Now suppose that because of intense lobbying by domestic baseball cap manufacturers, the Spanish government decides to impose an import quota of 20,000 basebell caps per...
33. The following diagram shows the domestic demand and supply curves for sunglasses. Assume that the world price for sunglasses is $10 per unit. 60 50 45 40 35 30 20 15 10 200 400 600 800 1000 Part : With no trade allowed, what are the equilibrium price and equilibrium quantity for sunglasses? Part 2: If the country allows free trade, (a) how many sunglasses will domestic consumers demand and how many sunglasses will domestic producers produce? (b) Will...
3. The following diagram shows the domestic demand and supply curves for sunglasses. Assume that the world price for sunglasses is S10 per unit. 60 50 45 40 35 30 20 15 10 200 400 600 800 1000 Part 1: With no trade allowed, what are the equilibrium price and equilibrium quantity for sunglasses? Part 2: If the country allows free trade, (a) how many sunglasses will domestic consumers demand and how many sunglasses will domestic producers produce? (b) Will...
In Exercise 4 in Chapter 2, we examined a vegetable fiber traded in a competitive world market and imported into the United States at a world price of $4.00 per pound. U.S. domestic supply and demand for various price levels are shown in the following table. U.S. Supply U.S. Demand Price (million pounds) (million pounds) 2.00 4.00 8.00 22 8.00 10.00 10 1 0 12.00 12 4 18 The demand curve is given by 04. Qp = 40.00 -3.00P. OB....
25. Too few resources are devoted to the creation of knowledge because profit-seeking firms A) B) C) D) undervalue knowledge in their pursuit of revenues. abuse their patents. tend to free-ride on the knowledge that others have developed. tend to rely on existing employee knowledge. 26. If policymakers use a pollution tax to control pollution, the tax per unit of pollution should be set A) B) equal to the marginal external cost at the economically efficient level of pollution. equal...
(1)
If the world price is above the domestic equilibrium price, the
domestic country is likely to ____________________ the good.
(2)
The difference between what an economy sells to and buys from
foreigners is _________________.
(3)
The idea that exchange rates and prices adjust to equalize the
cost of living across international boundaries is called
__________________________.
(4)
In the graph below, when the world price is $3, how many units
are...
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