Question 2 Suppose that the demand for rice in Japan is given by the function Q = 100-p and the domestic supply is Q = p. Suppose that the inverse world supply function is p = 30. (a) What would be the change in domestic producer surplus if imported rice is banned? (b) What would be the change in consumer surplus if a $5 tariff is imposed on imported rice? (c) What would be the change in imports if a $5 tariff is imposed on imported rice?
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- The demand for cameras in a certain country is given by D = 8000 – 30P, where P is the price of acamera. Supply by domestic camera producers is S = 4000 + 10P. If this economy opens to tradewhile the world price of a camera is $50, and the government imposes a tariff of $30 per camera,what will be the quantity of cameras that this country imports or exports?China placed tariffs on the importation of US soybeans. Assume that the domestic market for soybeans in China is described by the following equations: Demand: P = 11.5 – Q Supply: P = 5.5 + Q Price is in 10 Yuan (¥) per bushel of soybeans and the units for Quantity are 100 million bushels per year. This is to make graphing simpler. This does NOT mean that the price is 10 and quantity is 100. Rather it means that if the price was 40¥ and the quantity was 7,500,000,000 bushels, this would plot as 4 and 7.5 respectively. The world price for soybeans is ¥65/bushel (this would graph as a horizontal line at 6.5). Graph the soybean market in China showing equilibrium both with no barriers to trade and with a ¥15/bushel tariff. Be sure to fully and clearly label the graph including: Domestic Demand curve (D), Domestic Supply curve (S), the World Price (WP), and the Price with tariffs (PT), along with the quantities imported both with and without the tariff. Based on your graph, what…What would be the effect of ANWR production on the world price of oil given that ɛ = - 0.50, 1 = 0.40, the pre-ANWR daily world production of oil is Q, = 82 million barrels per day, the pre-ANWR world price is p, = $100 per barrel, and daily ANWR production would be 0.8 million barrels per day? For simplicity, assume that the supply and demand curves are linear and that the introduction of ANWR oil would cause a parallel shift in the world supply curve to the right by 0.8 million barrels per day. Determine the long-run linear demand function that is consistent with pre-ANWR world output and price. The long-run demand function is Q = 123 – 0.41p`. Determine the long-run linear supply function that is consistent with pre-ANWR world output and price. The long-run supply function is Q = 49.2 + 0.328p`. Determine the post-ANWR long-run linear supply function. The long-run supply function with ANWR oil production is Q= 50 + 0.328p'. Use the demand curve and the post-ANWR supply function to…
- The demand for cameras in a certain country is given by D=8000−30P, where P is the price of a camera. Supply by domestic camera producers is S=4000+10P. Suppose that world price of a camera is $150. If this country decides to trade, which of the following is true? Group of answer choices 3000 cameras will be exported Domestic production of cameras will decrease by 500 Domestic production of cameras will increase by 500 2000 cameras will be importedAssume that there are only two countries in the world: Venezuela and the U.S. Venezuela's demand curve for oil drilling rigs is (all prices are in millions of U.S. dollars): Qd = 440-20 P Its supply curve is: Qs 120 +30P a) Derive Venezuela's import demand schedule. What would the price of oll drilling rigs in the absence of trade be?"10 10 20 30 40 50 60 70 80 90 100 Baseball caps (thousands per month) Suppose that the world price of baseball caps is €1 and there are no import restrictions on this product. Assume that Spanish consumers are indifferent between domestic and imported baseball caps. Instructions: Enter your answers as whole numbers. a. What quantity of baseball caps will domestic suppliers supply to domestic consumers? thousand b. What quantity of baseball caps will be imported? thousand Now suppose a tariff of €1 is levied against each imported baseball cap. C. After the tariff is implemented, what quantity of baseball caps will domestic suppliers supply to domestic consumers? thousand d. After the tariff is implemented, what quantity of baseball caps will be imported? thousand Price (€ per cap)
- Assume that all tablets are identical goods, and that the market is competitive. The demand for tablets from users in Europe is given by the demand curve Q = 300 - 2P; and the supply of tablets from European manufacturers is given by the supply curve Q = 20 + 8P; where the price P is measured in hundreds of euros and the quantities Q are measured in millions. The market for tablets in Europe is large enough to influence the world price. The export supply curve of foreign manufacturers selling in the European market is given by Q = 20P – 20. 1. What would be the price of a tablet in Europe if imports were banned? 2. If tablets can be imported freely into Europe: (a) What is the equilibrium price of tablets in the European market? (b) What are the quantities consumed, produced, and imported in the European market? (c) What are the resulting consumer, producer, and total social surpluses in Europe? 3. If the European Union imposes a tariff t (in hundreds of dollars) on each tablet…What would be the effect of ANVWR production on the world price of oil given that E = - 0.30, n= 0.40, the pre-ANWR daily world production of oil is Q, = 82 million barrels per day, the pre-ANWR world price is p, = $100 per barrel, and daily ANWR production would be 0.8 million barrels per day? For simplicity, assume that the supply and demand curves are linear and that the introduction of ANWR oil would cause a parallel shift in the world supply curve to the right by 0.8 million barrels per day. Determine the long-run linear demand function that is consistent with pre-ANWR world output and price. The long-run demand function is Q= 106.6 - 0.246p . Determine the long-run linear supply function that is consistent with pre-ANWR world output and price. The long-run supply function is Q = 49.2 +0.328p Determine the post-ANWR long-run linear supply function. The long-run supply function with ANWR oil production is Q = 50 + 0.328p. Use the demand curve and the post-ANWR supply function to…On the following graph, use the purple line (diamond symbol) to draw the Kazakhstan's supply curve including the quota SK+Q. (Hint: Draw this as a straight line even though this curve should be equivalent to the domestic supply curve below the world price.) Then use the grey line (star symbol) to indicate the new price of grapes with a quota of 120,000 grapes. PRICE (Dollars per ton) 4000 3600 3200 2800 2400 2000 1600 Q1200 800 400 0 0 40 S. K D K Pw 80 120 160 200 240 280 320 360 400 QUANTITY (Thousands of tons) SK+Q The equivalent import tariff for Kazakhstan's grape import quota is $ Price with Quota A Change in PS Quota Rents DWL (?) In the previous graph, use the green area (triangle symbol) to shade the area that represents the effect of the quota on domestic producer surplus (PS) relative to domestic producer surplus under free trade. Use the tan quadrilateral (dash symbols) to shade the area that represents the quota rents. Finally, use the black areas (plus symbol) to indicate…
- Suppose the demand and the supply for lumber (harvested wood processed in a sawmill) used for construction in Australia are given byQD =100 – 2PQS = 1/2PAssume also that the market is perfectly competitive.Suppose the lumber market described was closed to the rest of the world. Now it opens to trade and the world price of lumber is 20. Compute the equilibrium price, quantity supplied by domestic producers, and quantity demanded by domestic consumers.2.Use a demand and supply graph to show how consumer surplus, producer surplus, and total surplus change with international trade.3. Now suppose that Country A is a major exporter of lumber to Australia and in an effort to impose sanctions on Country A, Australia imposes a tariff of t=10 on all lumber imported into Australia. Use a graph of supply and demand to show how the tariff changes consumer, producer and total surplus.4. Calculate the equilibrium price, quantity produced and demanded domestically, tariff revenue, and deadweight loss.Consider two countries, home and foreign and a single good, Y. Assume that home country imports good Y from foreign country. The import demand curve for good Y in home country is given by: MD = 170 – 2PY and the export supply curve for good Y in Foreign country is given by: EX = PY – 40. A) Consider the use of import tariff vs. import quota in Home country that will result in the same amount of good Y imports and the domestic price of good Y. If quota rents are given to Foreign country, which policy, i.e., import tariff vs. import quota, is preferable by Home country on the basis of its effect on social welfare? Explain your reasoning.A small country can import a good at a world price of $10 per unit. The domestic demand and supply curves are given by the following equations: Demand: D = 400 – 5P Supply: S = 20 + 10P, where D is the quantity demanded, S is the quantity supplied, and P is price a) Derive the import demand curve of the country and determine the level of imports. b) Calculate the effects of a per-unit tariff of $ 5 levied on imports on consumers, producers, government revenue, and overall national welfare, using the concepts of consumer surplus, producer surplus, and deadweight loss. c) Suppose that each unit of production yields a marginal social benefit of $10 and calculate the effect of the tariff on total welfare.