Homework Answers
Answer - The import tariff relief on the raw material is of no use for the consumers. But the producer will be able to procure the raw material at cheaper cost here. Thus their cost of production will reduce. On the other hand , the tariff on the import of finished goods will protect the facing of the competition by the domestic producers. Due to this , the consumer surplus will decrease , domestic industries will be more flourished and the producer surplus will increase.
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2. Suppose that the Sultanate of Oman released import tariffs on raw materials but not on...
3. Suppose that a firm that is refining raw materials also pollutes the water, a public...
3. Suppose that a firm that is refining raw materials also pollutes the water, a public health concern. The marginal costs of the raw materials are MPC, but the pollution cost is MEC (marginal external cost). The total social cost MSC = MEC + MPC. Use the figure below to answer the following questions: MSC = MPC + MEC Price MPC Quantity . Qe Qi Qo a. What is the equilibrium price and quantity, assuming that the pollution is not...
2. The president is considering increasing tariffs on the import of many Chinese products. Using the...
2. The president is considering increasing tariffs on the import of many Chinese products. Using the model of a small open economy, discuss in words and show graphically how the policy would affect the national saving, investment, the trade balance, the real interest rate, and the real exchange rate for the US. Who would be hurt by such a policy, and who stands to benefit?
5. The Netherlands primarily exports agricultural products, while importing raw materials such as natural gas, metal...
5. The Netherlands primarily exports agricultural products, while importing raw materials such as natural gas, metal ores, and grains. Analyze the impact of the following events on the Netherland's terms of trade: a. Farm pollution in China is worsening. b. Egypt is planning to import large quantities of liquefied natural gas. c. Germany has a sustainable development strategy for raw materials and energy productivity d. OPEC's agreement with Russia cut oil production and pushing oil prices higher, e. A rise...
4. Tariffs reduce the volume of imports. Do tariffs also reduce the volume of exports? Explain...
4. Tariffs reduce the volume of imports. Do tariffs also reduce the volume of exports? Explain your answer. ` 5. Suppose that the comparative-cost ratios of two products-mangoes and sardines-are as follows in the hypothetical nations of Mangolia and Sardinia. Mangolia: 1mango = 2 cans of sardines Sardinia: 1 mango = 4 cans of sardines In what product should each nation specialize Explain why the terms of trade of 1 mango = 3 cans of sardines would be acceptable to...
TARIFFS PARTIAL EQUILIBRIUM DUE: Suppose we have the following demand and supply functions (taken from Assignment...
TARIFFS PARTIAL EQUILIBRIUM DUE: Suppose we have the following demand and supply functions (taken from Assignment #2). HOME FOREIGN Demand P100-2Q SupplyPQ DemandP- 200 2Q SupplyP-4Q 1:Two-country model with IMPORT TARIFFS: use the functions above (1 point) a) Calculate the autarchy prices in each country. Who imports? Exports? (1 point) b) (2 point) c) (1 points)d) Suppose the importer imposes an import tax of $2 per unit. Calculate the new equilibrium world price. What is Home's and Foreign's domestic prices?...
(1) Suppose the country of Rotherham is targeted by Home country tariffs. Some possible consequences of...
(1) Suppose the country of Rotherham is targeted by Home country tariffs. Some possible consequences of these tariffs include a.Rotherham residents make fewer visits to the Home country, so they buy fewer Home country products b. the Rotherham government imposes tariffs on Home country products c. Home country firms doing business in Rotherham get treated more harshly by the Rotherham government d. both B and C e.A and B and C (2) There is always a loss of world Total...
QUESTION 1 Suppose the country of Rotherham is targeted by Home country tariffs. Some possible consequences...
QUESTION 1 Suppose the country of Rotherham is targeted by Home country tariffs. Some possible consequences of these tariffs include, a. Rotherham residents make fewer visits to the Home country, so they buy fewer Home country products b. the Rotherham government imposes tariffs on Home country products c. Home country firms doing business in Rotherham get treated more harshly by the Rotherham government d. both B and C e. A and B and C QUESTION 2 There is always a...
1. 2. Crane Corporation incurred the following transactions. Purchased raw materials on account $46,400. Raw Materials...
1. 2. Crane Corporation incurred the following transactions. Purchased raw materials on account $46,400. Raw Materials of $36,100 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,900 was classified as indirect materials. Factory labor costs incurred were $60,000. Time tickets indicated that $54,100 was direct labor and $5,900 was indirect labor. Manufacturing overhead costs incurred on account were $81,500. Manufacturing overhead was applied at the rate of 150% of direct labor cost. Goods costing...
Malaysian government has imposed import tariffs on imported photocopy machine from China to protect their local...
Malaysian government has imposed import tariffs on imported photocopy machine from China to protect their local industry from foreign competition. Given are the two equations of domestic demand and supply of photocopy machine in Malaysia: Demand: Qd= 135 - 5P Supply: Qs= 15 + 15P where Q denotes quantity (in thousand units) and P denotes price (in RM thousand per unit). i) If the world price is RM5 thousands per unit and import tariff of 10% is imposed, determine the...
Sheridan Corporation incurred the following transactions. 1. Purchased raw materials on account $51,800. 2 Raw Materials...
Sheridan Corporation incurred the following transactions. 1. Purchased raw materials on account $51,800. 2 Raw Materials of $45,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $9,000 was classified as indirect materials. 3. Factory labor costs incurred were $64,100. 4. Time tickets indicated that $54,900 was direct labor and $9,200 was indirect labor. 5. Manufacturing overhead costs incurred on account were $83,600. 6. Manufacturing overhead was applied at the rate of 160% of direct...
3. Suppose that a firm that is refining raw materials also pollutes the water, a public health concern. The marginal costs of the raw materials are MPC, but the pollution cost is MEC (marginal external cost). The total social cost MSC = MEC + MPC. Use the figure below to answer the following questions: MSC = MPC + MEC Price MPC Quantity . Qe Qi Qo a. What is the equilibrium price and quantity, assuming that the pollution is not...
2. The president is considering increasing tariffs on the import of many Chinese products. Using the model of a small open economy, discuss in words and show graphically how the policy would affect the national saving, investment, the trade balance, the real interest rate, and the real exchange rate for the US. Who would be hurt by such a policy, and who stands to benefit?
5. The Netherlands primarily exports agricultural products, while importing raw materials such as natural gas, metal ores, and grains. Analyze the impact of the following events on the Netherland's terms of trade: a. Farm pollution in China is worsening. b. Egypt is planning to import large quantities of liquefied natural gas. c. Germany has a sustainable development strategy for raw materials and energy productivity d. OPEC's agreement with Russia cut oil production and pushing oil prices higher, e. A rise...
TARIFFS PARTIAL EQUILIBRIUM DUE: Suppose we have the following demand and supply functions (taken from Assignment #2). HOME FOREIGN Demand P100-2Q SupplyPQ DemandP- 200 2Q SupplyP-4Q 1:Two-country model with IMPORT TARIFFS: use the functions above (1 point) a) Calculate the autarchy prices in each country. Who imports? Exports? (1 point) b) (2 point) c) (1 points)d) Suppose the importer imposes an import tax of $2 per unit. Calculate the new equilibrium world price. What is Home's and Foreign's domestic prices?...
1. 2. Crane Corporation incurred the following transactions. Purchased raw materials on account $46,400. Raw Materials of $36,100 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,900 was classified as indirect materials. Factory labor costs incurred were $60,000. Time tickets indicated that $54,100 was direct labor and $5,900 was indirect labor. Manufacturing overhead costs incurred on account were $81,500. Manufacturing overhead was applied at the rate of 150% of direct labor cost. Goods costing...
Sheridan Corporation incurred the following transactions. 1. Purchased raw materials on account $51,800. 2 Raw Materials of $45,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $9,000 was classified as indirect materials. 3. Factory labor costs incurred were $64,100. 4. Time tickets indicated that $54,900 was direct labor and $9,200 was indirect labor. 5. Manufacturing overhead costs incurred on account were $83,600. 6. Manufacturing overhead was applied at the rate of 160% of direct...
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