A large country introduces export subsidies with free international trade and perfect competition. Then A Home consumer rent will increase B Home producer rent will increase. C the price of the good for domestic consumers will decrease D the world market price for the good will decrease. E aggregate welfare in Home may increase.
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A:
A large country introduces export subsidies with free international trade and
| A |
Home consumer rent will increase |
|
| B |
Home producer rent will increase. |
|
| C |
the price of the good for domestic consumers will decrease |
|
| D |
the world market price for the good will decrease. |
|
| E |
aggregate welfare in Home may increase. |
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- Home's demand curve for wheat isD = 100- 20P.Its supply curve isS= 20 + 20P.Derive and graph Home's import demand schedule. What would the price of wheat be in the absence of trade?2. Now add Foreign, which has a demand curve*D=80-20pand a supply curve = 40 + 20P.Derive and graph Foreign's export supply curve and find the price of wheat that would prevail in Foreign in the absence of trade.b. Now allow Foreign and Home to trade with each other, at zero transportation cost.Find and graph the equilibrium under free trade. What is the world price? What isthe volume of trade? 3. Home imposes a specie tariff of 0.5 on wheat imports.a. Determine and graph the effects of the tariff on the following: (1) the price ofwheat in each country; (2) the quantity of wheat supplied and demanded in each country; (3) the volume of trade.b. Determine the effect of the tariff on the welfare of each of the following groups:(1) Home import-competing producers; (2) Home consumers; (3) the Homegovernment.c.…The figure above shows the domestic market for calculators in Haiti. What is the change in total surplus in Haiti because of trade? a. $865 b. $625 c. $1500 d. $2800 Price of Calculators $27 12 7 Domestic Supply World Price Domestic 2 Demand 0 150 300 400 Quantity of CalculatorsAssume Australia is an importer of sofas and there are no trade restrictions. Australian consumers buy 1 000 000 sofas per year, of which 450 000 are produced domestically and 550 000 are imported.a Suppose that a technological advance among Swedish sofa manufacturers causes the world price of sofas to fall by $200. Draw a graph to show how this change affects the welfare of Australian consumers and Australian producers, and how it affects total surplus in Australia.b After the fall in price, Australian consumers buy 1 150 000 sofas, of which 300 000 are produced domestically and 850 000 are imported. Calculate the change in consumer surplus, producer surplus and total surplus from the price reduction.c If the government responded by putting a $200 tariff on imported sofas, what would this do? Calculate the revenue that would be raised and the deadweight loss. Would it be a good policy from the standpoint of Australian welfare? Who might support the policy?d Suppose that the fall in…
- Finland imports shoes into its country; they are a price taker in this market. Suppose the world price of shoes is $40. If Finland imposes a $10 tariff on shoes, what would be the domestic price of shoes and what will happen to the quantity bought? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. The quantity bought will increase and the price will be $30. a The quantity bought will fall and the price will be $30. The quantity bought will fall and the price will be $50. The quantity bought will increase and the price will be $50.Economists argue for free trade in import markets because importing goods decreases total surplus. no one is made worse off by importing goods. all consumers and producers benefit from importing goods. O the gains to the U.S. producers outweigh the losses to the U.S. consumers the gains to the U.S. consumers outweigh the losses to the U.S. producersWhat would happen if the European Union (E.U.) put a quota on American jeans and only allowed their countries to import 5,000 pairs of jeans? A. American jeans would become very expensive and desirable in the EU. B. French jeans would be more popular than any jeans and America would stop importing jeans to Europe. C. American jeans would be less desirable in the EU and there would be no demand. D. Nothing, because European countries dislike American products.
- If Australia exports rice to Japan, then: Select one: a. Australian rice consumers are worse off. b. Japanese rice farmers are better off. c. Australian rice producers are better off. d. Japanese rice consumers are better off.A tariff is A. a tax imposed on imports. B. any non-subsidy used to increase trade. C. any non-tax action used to restrict trade. D. a subsidy granted to imports.Trying to construct a graph that shows U.S. Demand curve for sugar. U.S. Supply curve for sugar. Show world price and U.S. price (show dollar values). Show quantity supplied by U.S. firms and U.S. sugar consumption on graph (show values). Quantity is in pounds. These values are on the attached files. Figure how many pounds of sugar are imported. This will be a value. Show it on the graph. Shade the area(s) of dead-weight loss on the graph (no value needed). Mark the area which is the revenue for foreign sugar producers—figure the dollar value and note it on the graph. Sugar consumption in the U.S. 2009-2019 Pounds(Billions) 2009 21.82 2010 22.48 2011 22.26 2012 22.92 2013 23.58 2014 23.80 2015 23.80 2016 24.20 2017 24.09 2018 24.20 2019 24.25 Sugar production in the U.S. 2009-2019 Pounds(Billions) 2009 15.87 2010 15.65 2011 16.97 2012 17.85 2013 16.97 2014 17.30 2015 17.98…
- Ii, GRAPH O SETTINGS Supply Price of Computers ($) Somest Demand Tariff Amount 1,000 Nw Dom Eglum CALCULATIONS 800 World Price Domestic Quantity Supplied 110 Imports Domestic Quantity Demanded 190 Level of Imports 80 190 Tarf Amount $0 110 Quantity of Computers Taniff Revenue $0Suppose the European Union imposes trade sanctions (export quotas) on food sold to Russia. Imagine other nations do not increase their food exports to Russia. Which of the following does not happen? A. food prices increase in Russia B. consumer surplus declines in Russia C. food prices increase in the European Union D. export revenues decline in the European UnionConsider a large Home country which is a natural exporter of wheat. To support domestic wheat farmers, Home introduces a wheat export subsidy of $s per unit of exports, as shown in the figure below. Price 80 288 70 60 50 20 30 40 S Price 80 90 100 Quantity X₁ X₂ Ex Ex-s Im Exports i. What is the free trade equilibrium price, output and exports? How does the Home export subsidy affect domestic price, the world price and Home exports (a numerical answer is expected)? ii. Calculate the effect of the subsidy on Home consumer surplus, producer surplus and government revenue.