Question

Consider a large country that exports good Z. Some of the total quantity of Z that...

Consider a large country that exports good Z. Some of the total quantity of Z that is domestically produced is consumed by domestic consumers and the rest of it is exported. Then suppose that the government places a subsidy s on each unit of Z exported. While, obviously, this subsidy increases the quantity of Z exported, some of the production of Z continues to be purchased by domestic consumers. Show the effects of this export subsidy using a carefully labelled demand and supply diagram.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Consider a small country that imports good Z. Some of the total quantity of Z domestically...
Consider a small country that imports good Z. Some of the total quantity of Z domestically consumed is supplied by domestic producers and the rest of it is imported. Then suppose that the government imposed a tariff on each unit of Z that is imported, so that the quantity of Z imported is somewhat reduced. Draw a demand and supply diagram that shows the effect of the tariff. On your diagram clearly label the quantity of imports before the tariff...
Consider a small country that imports good X. Some of the total quantity of X domestically...
Consider a small country that imports good X. Some of the total quantity of X domestically consumed is supplied by domestic producers and the rest of it is imported. Then suppose that the government imposed a quota on the importation of X, so that the quantity of X imported is reduced to a quantity of Q. Draw a demand and supply diagram that shows the effect of the quota. On your diagram clearly label the quantity of imports before the...
Suppose that a country produces and exports wood. However, logging has the side effect of destroying...
Suppose that a country produces and exports wood. However, logging has the side effect of destroying the habitat of certain endangered species. In order to reduce this environmental damage, the country’s government has two policy options: (1) levy a domestic tax on logs (similar to a negative subsidy), or (2) impose an export tax on logs. Both policies aim to lower the price received by domestic loggers and, consequently, reduce domestic logging. a.      What are the effects of each policy...
Consider the case where the large nation Country 2 imports Good Z and decides to eliminate...
Consider the case where the large nation Country 2 imports Good Z and decides to eliminate its import tariff on Good Z. Suppose there is just one foreign exporter of Good Z, Country 3. (You don’t need to draw graphs for this problem.) When Country 2’s tariff is eliminated, (a) what happens to the price for the foreign sellers of Good Z? (b) what happens to the tax burden on Country 3’s producers caused by Country 2’s tariff? (c) what...
1) How might an export tariff in a large country improve the country's economic welfare? Group...
1) How might an export tariff in a large country improve the country's economic welfare? Group of answer choices a) The export tariff will never improve the country's welfare, since deadweight consumption and production losses always outweigh terms of trade gains. b) The export tariff will always improve the country's welfare, since there are no deadweight consumption and production losses. c) The export tariff will improve the country's welfare if deadweight consumption and production losses are greater than terms of...
QUESTION 11 Consider a case where a country imports of very large quantity of Good R...
QUESTION 11 Consider a case where a country imports of very large quantity of Good R and the Terms of Trade Effects Tariff Model holds. When the country changes from trade in Good R without a tariff to trade in Good R with a tariff (assuming no retaliation on that product), a. the total surplus of foreign producer countries falls and the world total surplus falls b. the total surplus of foreign producer countries falls and the world total surplus...
2. A demand curve indicate a. the maximum willingness to pay for a given quantity b.the...
2. A demand curve indicate a. the maximum willingness to pay for a given quantity b.the consumer's gain from exchange c.the market price of a good or service d. the equilibrum quantity 3. trade permitts countries to a. consume more than they capable of producing b.produce based on their comparative advantage c.specialize more fully d.all of above 4. which of the following dose not impact how elastic supply is? a. whether the supply is local or global b.the share of...
28) The economics law states that ‘the quantity of a product consumers are willing to buy...
28) The economics law states that ‘the quantity of a product consumers are willing to buy decreases as the market price of the product rises and vice versa”                               a) the consumer surplus                               b) the law of supply and demand                               c) the law of supply                               d) the law of demand 29) Lose in consumer benefit due to a tariff imposed on imported consumer good is called:                               a) Net-welfare gain                               b) Consumer deadweight cost                               c)...
QUESTION 31 A benefit of being in a customs union is,   a. a customs union tends...
QUESTION 31 A benefit of being in a customs union is,   a. a customs union tends to have more bargaining power in trade agreements than a country has by itself b. a customs union can accelerate the speed of technical advance c. both A and B d. neither A nor B 3 points    QUESTION 32 Which of the following is true regarding trade protectionism? a. intraindustry trade tends to cause more protectionist pressure than interindustry trade b. particular industries...
19. The method we used to determine whether a country/society was better or worse off after...
19. The method we used to determine whether a country/society was better or worse off after a change in policy or a movement towards free trade (from autarky) was a. by calculating the net effects b. by examining the total surplus c. by considering the deadweight loss triangles d. all of the above e. none of the above (not including d) ------------------------------------------------------------------------------------------------------------------------- 20. Consider the small Home country doing tariffs under PC. Which of the following statements is true? a....