Question

1. list one case for trade restrictions

2. Suppose the following table reflects the domestic supply and demand for radios:

Price $18 $16 $14 $12 $10 $8 $6 $4

Qs 8 7 6 5 4 3 2 1

Qd 2 4 6 8 10 12 14 16

a. Graph these market conditions and identify the equilibrium price and quantity.

b. Now suppose that foreigners enter the market, offering to sell an unlimited supply

of radios for $6 a piece. Illustrate and identify the new market price, domestic

quantity supplied and quantity demanded. How many radios will be imported?

c. If a tariff of $2 per radio were imposed, what will be the new market price?

Domestic quantity supplied? Radios imported? Tariff revenue?

d. As a response to complaints of radio producers, instead of imposing a $2 per radio

tariff, the government imposes an import quota of 9 radios. How will the results

of the quota differ from the results of a tariff?

Answer 1

answered by: anonymous