Question

Answer the question(s) below based upon the following diagram. $25 --- $15 world + Tariff world 10,000 12,000 25,000 42,000 60,000 8) Refer to the figure above. With free trade, the total quantity of imports would equal A) 10,000 units. B) 20,000 units. C) 22,000 units. D) 30,000 units. 9) Refer to the figure above. With free trade, the total value of imports would equal A) $10. B) $100,000. C) $200,000 D) $300,000. 10) Refer to the figure above. With the tariff, the quantity of imports falls to A) 10,000 units. B) 12,000 units. C) 14,000 units. D) 22,000 units.

Can someone help me with these questions?

Answer 1

In Q8 , Q9 & Q10 & Q 11. all options are wrong. Refer to image for explanation and correct answer.

s (Domestic Supply Curve) Government collection TP World Porte) $25+--- X $15 id + laru S-Domestic Supply D-Domestic Demand Curre R Pword WORLD D (Domestic Derend (wave) 104 12k-25k 42K GOK (@P) Quantity of mabort = Quando'ty dorianded at world pricg) - at world Price PW) Quantity supplied domestically at Pworld Domestically = 60,000 - 10,000 demand at PW = $10 / Domestically supplied at (Pw=$10) units Ans. - 50k = 50,000 (09) Total value of imports = Quantity imported & Pw (world pris: 810) = 50,000 X 10 = $500,000 (Q10) with Teseikh, Price = $15 Domestic Supply = 12,000 Domestic Demand = 42,000 New import = 42,000 - 12,000 = 30000 unit . Change in quantity importa = 50,000-30,000 = 20,000 units

ay Government gain - tariff per unit x no. of unit imported - $5 x 30,000 roke $ 150,000 Show)

Refer to diagram in photo attached for explanation of each answer of rest questions.

Q12. = C.  [ area shaded in pink = area of ∆AOD + ∆ BCR ]

Q13 = C [ producers gain = area of trapezium AFEO (refer diagram in attached image) ]

Q14 = D [ explanation: prohibitive tax is a tax that restricts imports by raising import price to a level that import becomes equal or greater to domestic price. From the above diagram a tariff of $10 will raise import price equal to domestic price I.e, $ 25. ]