such that 8,000 cars are produced at $22,500 per car. 1. Use a supply and demand diagram to graphically illustrate the example above. 2. Why is the increase in price less than the tariff? 3. Who bears the burden of the tariff? 4. What are government revenues from the tariff? 5. What is the “dead-weight loss” associated with the tariff – i.e., the lost in Producer Surplus and Consumer Surplus?

such that 8,000 cars are produced at $22,500 per car. 1. Use a supply and demand diagram to graphically illustrate the example above. 2. Why is the increase in price less than the tariff? 3. Who bears the burden of the tariff? 4. What are government revenues from the tariff? 5. What is the “dead-weight loss” associated with the tariff – i.e., the lost in Producer Surplus and Consumer Surplus?

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter4: Supply And Demand: An Initial Look

Section: Chapter Questions

Problem 3TY

See similar textbooks

Similar questions

Scenario 1: Because of a recent international trade agreement, the Indian government reduces the tariff on imported coffee. Do you think a reduction of tariff by the government affect the supply or the demand for coffee? If yes, why do you think so? Which determinant of demand or supply is being affected? How will this change the equilibrium price and quantity of coffee? Explain your reasoning and show the changes graphically. Scenario 2: Suppose the National Institutes of Health (NIH) publishes a study finding that coffee drinking reduces the probability of getting colon cancer. Do you think this will affect the market for coffee? If yes, why do you think so? Which determinant of demand or supply is being affected? How will this change the equilibrium price and quantity of coffee? Explain your reasoning and show the changes graphically. Scenario 3: Now, combine both the scenarios. In case if the Indian government reduces the tariff on imported coffee, and the recent study published by…
00 International Trade-End of Chapter Problem The accompanying table provides data regarding domestic demand and domestic supply of apples in the United States. Price (per apple) 0.15 0.25 0.35 0.45 0.55 Price (cm) 22 ARAQARAN 15 a. Based on the information provided in the table, move the points to plot the domestic demand and domestic supply curves in the graph. 60 50 25 15 10: Quantity supplied domestically (millions of pounds per year) 0 8290 6,290 7,150 Market for apples 8,010 8,870 9,730 BB/D 7,150 8010 Quantity (millions of pounds) Domestic dema Domestic supp d. As a result of trade, consumer surplus economic surplus 9,730 10,500 Quantity demanded domestically (millions of pounds per year) 9,730 8,870 8,010 7,150 6,290 Consumer surplu... Producer surplu.... b. Now consider what happens when the price at which apples trade in the world market is $0.10 per apple above the domestic price. If the United States allows international trade, million pounds of apples will be produced…
Suppose that Kenji and Lucia are the only suppliers of shoes in a particular market. The following table shows their annual supply schedules: # Price Kenji's Quantity Supplied Lucia's Quantity Supplied (Dollars per pair) (Pairs) 0 (Pairs) 16 10 20 16 32 30 24 44 40 28 52 50 32 56 On the following graph, plot Kenji's supply of shoes using the green points (triangle symbol). Next, plot Lucia's supply of shoes using the purple points (diamond symbol). Finally, plot the market supply of shoes using the orange points (square symbol). Note: Line segments will automatically connect the points. Remember to plot from left to right. (?) 60 T OL F11 ? 5 Esc 69°F Rain coming F1 ! F2 0- @ F3 0+ # F4 $ F5 % F6 F7 C F8 & F9 * F10 O 28 F12 Fn Lock 5 Inse
How did an export ban on onion by India affected the price of local onion in Bangladesh? Can you show this change/ effect on a diagram? If demand for local onion increases during Eid (in future) what changes do you see in the above diagram (from question 2)? Will the supply curve be affected or the demand curve for local onion? If less rainfall limited the supply of Indian onion production, how will it change the equilibrium price in the Indian market? If Indian Government reduces export incentive, how will it affect/change demand or supply of onion in India in the free market? Show with a diagram Onion prices in Bangladesh are unlikely to come down unless prices fall in India with a bumper production. What can we do to reduce the onion price in BD? Is there a role of the government?
In the following figure, how many pounds of sugar are sellers willing to sell at a price of $20? How much is demanded at this price? What is the buyer's willingness to pay when the quantity is 20 pounds? Is this combination of $20 per pound and a quantity of 20 pounds an equilibrium? If not, graphically identify the unexploited gains from trade. Price of sugar per pound $45 20 20 30 Supply Demand 40 Quantity of sugar (pounds)
Consider the market for gasoline that is initially in equilibrium. Suppose that the Middle East, a major supplier of petroleum used to produce gasoline, erupts into war. At the same time suppose that the price of electric vehicles falls. Given these changes and holding everything else constant, what happens to the equilibrium price and quantity in the market for gasoline relative to the initial equilibrium price and quantity in the market a. The equilibrium price may increase, decrease or remain the same while the equilibrium quantity will decrease b. The equilibrium price may increase, decrease or remain the same while the equilibrium quantity willincrease c. The equilibrium price will increase while the equilibrium quantity may increase, decrease or remain the same d. The equilibrium price will decrease while the equilibrium quantity may increase, decrease or remain the sam
Suppose a decrease in the world demand for desktop computers causes the price of desktop computers to fall from $600 to $500. Before the fall in demand, Juna, a local computer dealer in Japan, used to produce 9,000 desktop computers and exported 50 percent of it to other countries every week. However, after the fall in demand, Juna reduced its production to 8,000 units and exports only 40 percent of its total output.a. What are the changes in the quantity sold to domestic consumersb. What are the changes in the consumer surplus?c. Sketch a diagram to illustrate the changes for Juna.
I need help constructing the diagram in Excel. The major BP oil spill in the Gulf of Mexico substantially reduced the harvest of shrimp and other seafood in the Gulf, but had limited impact on the prices that U.S. consumers paid in 2010 (Emmeline Zhao, “Impact on Seafood Prices Is Limited,", Wall Street Journal, June 20, 2010). The reason was that the United States imports about 83% of its seafood and only 2% of domestic supplies come from the Gulf. Use a supply-and-demand diagram to illustrate what happened.
The table shows the hypothetical demand and supply for coffee beans in two countries: Mexico and Armenia. Price ($) per pound of coffee beans Price ($/lb) Mexico quantity demanded (lb) Mexico quantity supplied (lb) Armenia quantity demanded (lb) Armenia quantity supplied (lb) 8 180 500 155 210 7 200 460 180 180 6 250 410 200 160 5 280 360 220 140 4 320 320 240 125 3 350 280 260 115 In autarky, what would the equilibrium price and quantity be in Mexico and Armenia? equilibrium price in Mexico: $ equilibrium quantity in Mexico: lb equilibrium price in Armenia: $ equilibrium quantity in Armenia: lb
Suppose that Felix and Janet are the only suppliers of collectible action figures in a particular market. The following table shows their annual supply schedules: Price (Dollars per action figure) 2 4 6 8 10 Felix's Quantity Supplied Janet's Quantity Supplied (Action figures) (Action figures) 0 4 6 8 10 10 18 24 28 30 On the following graph, plot Felix's supply of collectible action figures using the green points (triangle symbol). Next, plot Janet's supply of collectible action figures using the purple points (diamond symbol). Finally, plot the market supply of collectible action figures using the orange points (square symbol).
Suppose the Canadian demand for and the Japanese supply of cars to Canada is shown in the table below (quantities in thousands). Quantity Supplied (before tariff) Quantity supplied (after tariff) Price ($) 13,000 14,000 15,000 16,000 17,000 18,000 19,000 20,000 Quantity Demanded 170 150 130 110 90 70 50 30 50 70 90 110 130 150 170 190 a) The present equilibrium price is $ and quantity is b) Suppose that the Canadian government imposes a $2,000 per car tariff on imported Japanese cars. Show the new supply in the last column above. thousand. thousand. c) The new equilibrium price is $ and quantity is d) The total revenue received by the government will be $ e) Assume, instead, that the government imposes an import quota of 90,000 cars. The new equilibrium price is $ quantity is thousand. f) Does the government now receive any revenue? No million. and
Assume that Grainland currently produces wheat and does not trade wheat in international markets. (a) Draw a correctly labeled demand and supply graph for the domestic wheat market in Grainland. Label the equilibrium price, PePe, and the equilibrium quantity, QeQe. (b) Suppose the price of wheat in the world market is lower than the domestic price of wheat in Grainland. Assume now Grainland wants to trade wheat in the world market. (i) On your graph from part (a), label the world market price of wheat as PWPW, and identify the domestic quantity demanded of wheat at PWPW, as Q3Q3, and the domestic quantity supplied of wheat labeled as Q1Q1. (ii) Will Grainland export or import wheat? Explain. (c) With international trade in wheat, who will benefit in Grainland: domestic producers, domestic consumers, neither or both? Explain. (d) Suppose that the government of Grainland decides to provide a subsidy for wheat farmers to make the country more competitive and sell wheat at the world market…