Question

Suppose that the equations S = 2P and D = 60 – P represent the domestic...

Suppose that the equations S = 2P and D = 60 – P represent the domestic supply and demand for Home market. All markets in this question are under perfect competition.

a. Suppose Home is a small country and the price in the international market is 15.

i. (4’)Suppose that Home uses a TRQ, tariff-rate quota, in the market: 5 units will be allowed to be imported tariff free and a 20% tariff rate will be charged in excess of the 5 units. Use a chart to illustrate the import market. What is the tariff revenue collected by the government in this case? Compared to a simple case of 20% tariff, is the national welfare higher with TRQ?

b. Suppose Home is a large country and the equations S* = 5P* and D* = 66 – P* describes the demand and supply in its trade partner Foreign.

i. (2’)With free trade, what is the price in Home country?

ii. (3’)Suppose Home imposes a $3 per unit tariff, what is the equilibrium price in the world market? Compared to free trade, is the national welfare of Home higher with such a tariff?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose that domestic demand in the market for good X is given by the equation Qd...
Suppose that domestic demand in the market for good X is given by the equation Qd = 60 - P. And that domestic supply in the market for good X is given by the equation Qs = 2P Suppose the world price is $10 and the country allows free trade. What is consumer surplus with free trade? Suppose the government imposes a $5 tariff on imports. What is the gain to suppliers from this tariff? What is the gain to...
9.21) Suppose the domestic demand equation for a widget is given by Q = 80 –...
9.21) Suppose the domestic demand equation for a widget is given by Q = 80 – 2P and the domestic supply equation is Q = -10 + P. a) Assume there is free trade and the world price of the widget is 20 liras. How many units of this widget will be imported? b) Calculate the change in the consumer supply and producer supply if the government applies a 5 liras per unit tariff on the product. What will be...
1. list one case for trade restrictions 2. Suppose the following table reflects the domestic supply...
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...
I ONLY NEED #2 PLEASE 1. The following equations represent a small country's home supply and...
I ONLY NEED #2 PLEASE 1. The following equations represent a small country's home supply and demand curves for widgets: S = 0 + 2P and D = 1,000 – 2P. A) Find the equilibrium price and quantity for widgets in autarky. B) Now let the world price be $200. Find domestic production, domestic consumption, and the amount of imports. C) Derive the country's import demand curve (equation) for widgets. D) Let the country impose a 10% tariff. Calculate its...
The world consists of two countries: Home and Foreign. We observe supply and demand curves in...
The world consists of two countries: Home and Foreign. We observe supply and demand curves in both countries: D= 50?25P and S=25P in Home D* = 200?25P* and S* = 25P?50 in Foreign a) Derive MD (import demand) and XS (export supply) curves. b) Graph MD and XS. Find the world equilibrium (price and quantity) under free trade. c) Suppose that importer imposes a tariff t = 2. Find the new prices in Home and Foreign. How will the volume...
The following are the equations of demand and supply of rice in Home Country and Foreign...
The following are the equations of demand and supply of rice in Home Country and Foreign Country. P in the equations is the price of rice in the same currency. Home Country’s demand for rice is QDH = 2,400 – 30P Home Country’s supply for rice is QSH = 50P Foreign Country’s demand for rice is QDF = 4,800 – 40P Foreign Country’s supply for rice is QSF = 80P Calculate i) the equilibrium price of rice in Home Country...
Given the previous questions with a world price of 34, and the domestic demand and supply...
Given the previous questions with a world price of 34, and the domestic demand and supply curves given by the following equations: D: P= 80 - 2Q S: P= 10 + 3Q Suppose the government imposes a tariff equal to 6 which increases the price in the domestic market to 40. Given the tariff and new price to consumers, domestic consumers will now import ______ units of the good, the government will collect ______ in tariff revenue, and the total...
2. Suppose that Economica is a large country. The export supply curve is as follows Price...
2. Suppose that Economica is a large country. The export supply curve is as follows Price Quantity 60 60 80 120 100 180 120 240 Assume that Economica imposes a $20 tariff on imported oil. Assume that the world price of oil is initially $80. i. the terms of trade effect j. total deadweight loss k. effect on foreign welfare l. effect on world welfare
4. Suppose the domestic supply and demand curves for petroleum in the U.S. are, Qs =...
4. Suppose the domestic supply and demand curves for petroleum in the U.S. are, Qs = 10P - 300 Qd = 3000 - 20P Let the world trade price be $50 per barrel. 1) What is the equilibrium quantity of imports? 2) Suppose a specific tariff of $10 per barrel is imposed. Calculate Consumer surplus, producer surplus, and tariff revenue. 3) Suppose the government imposes an import quota of 1200 units of barrels. Find the trading price for petroleum.
1) Suppose the domestic supply (QS U.S.) and demand (QDU.S) for bicycles in the United States...
1) Suppose the domestic supply (QS U.S.) and demand (QDU.S) for bicycles in the United States is represented by the following set of equations: QS U.S. = 2P QDU.S. = 200 – 2P. Demand (QD) and supply (QS) in the rest of the world is represented by the equations: QS = P QD =160 – P. Quantities are measured in thousands and price, in U.S. dollars. After the opening of free trade with the United States, if the world price...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT