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- With the $20 tariff, what is the 'new' price in the domestic contact lens market? Price Quantity Supplied Quantity Demanded World Price World Price + Tariff 0 0 240 100 120 20 20 220 100 120 40 40 200 100 120 60 60 180 100 120 80 80 160 100 120 100 100 140 100 120 120 120 120 100 120 140 140 100 100 120 160 160 80 100 120 180 180 60 100 120 200 200 40 100 120 220 220 20 100 120 240 240 0 100 1206. Suppose Home is a small country and has a monopolist with Marginal cost 2q. The world price is pw40. The Home inverse demand function is P = 150 - Q. (a) Find the Domestic Free Trade equilibrium outcome. P = (domestic) q =_ ImportsWhy is product differentiation by itself incapable of explaining intra-industry trade? Why does the explanation of intra-industry trade require both product differentiation and economies of scale?
- 15. Which one of the following statements about international trade is FALSE? a) when consumption externality is ignorant, importing will always be environmentally beneficial b) Import happens only when the global price for a goods is smaller than the domestic price c) Exports of carbon emissions happens when a country importing goods from other countries d) Multi-national companies' production decisions should be blamed for creating pollution havens in less-developed countries e) The process and production methods used in trade agreements should be blamed for creating pollution havens. 16. Which one of the following statements about trade and the environment is true? a) Inclusion of externality impacts increases the net gains from trade b) Inclusion of externality impacts implies that international trade decreases overall social welfare c) Free trade always has a damaging effect on the environment d) Free trade always has a beneficial effect on the environment e) Inclusion of…4. Effects of a regional trading arrangement Consider a hypothetical world consisting of only three countries: Liechtenstein, Canada, and France. Each country produces grain. Liechtenstein is a small economy compared to Canada and France and thus cannot influence foreign prices. On the following graph, the supply and demand schedules of Liechtenstein are shown as Such and DLch- Foreign supply schedules of grain are perfectly elastic: Canada is a more efficient supplier of grain than France because its supply price is $1.00 per bushel (Scan), whereas France's supply price is $2.00 per bushel (Sp). ? 10.00 SL 9.00 8.00 7.00 6.00 5.00 4.00 3.00 A 2.00 Scan 1.00 6 12 18 24 30 48 54 60 Calculate the quantity of bushels Liechtenstein imports when the three nations engage in free trade. Enter this value in the first row of the following table. Also indicate which country Liechtenstein imports from. Imports Scenario (Thousands of bushels) Imports from... Free trade With tariff With customs…One problem with the infant industry argument is that a) it must be approved by th choicese Federal Reserve Board. b) the protection is typically never removed, creating a domestic monopoly. c) it must be approved by the IMF and the World Bank. d) it fails to protect domestic industries from foreign competition.
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