Question

Suppose Rousonia imposes a tariff on products from the Kingdom of beJeweled States (KBS). At the...

Suppose Rousonia imposes a tariff on products from the Kingdom of beJeweled States (KBS). At the same time, KBS experiences economic growth. Using an offer curve framework, show the effects on Rousonia’s terms of trade and volume of trade.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

When Rousonia imposes a tariff on products from KBS and KBS experience a economic growth. then the product is an inelastic product, which has no impact on the increase in price. In this scenario, the terms of trade for the home country will improve due to the anti-clockwise movement. it shows that the KBS was earning excess profit before tax, even there is a tax that could not change the demand for the foreign product. so there is no much effect of tax to the purchase where the import increase from Y to Y' and supply/export is less.

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
When the home country imposes the tariff on imported products from a foreign country, what happens...
When the home country imposes the tariff on imported products from a foreign country, what happens to international equilibrium? Diagram with offer curves and explain.
Suppose that Japan imposes an anti-dumping tariff on imports of Chinese solar panels. Given that this...
Suppose that Japan imposes an anti-dumping tariff on imports of Chinese solar panels. Given that this will decrease Japanese imports of those goods. a) Comment on the effect on the Japanese IS curve. b) Show the answer using a graph.
Suppose that, to support domestic employment, the government imposes a 33.3% tariff on imports of clothing....
Suppose that, to support domestic employment, the government imposes a 33.3% tariff on imports of clothing. Fareeha spends ~8,000 on dresses each month. Before the tariff, the price of a dress produced domestically is NOO and the price of a foreign-made dress is ~300. Use an indifference curve-budget line analysis to show how imposing this tariff affects the quantity of dresses she buys compared to what she would have bought in the absence of the tariff. Will she buy a...
1) In a two good and two country framework, suppose home is exporting Cloth and importing...
1) In a two good and two country framework, suppose home is exporting Cloth and importing food. Home country imposes levies on import. What is the effect of such tariff on the terms of trade of Home? Explain it using a graph. 2) In a two good and two country framework, suppose home is exporting Cloth and importing food. Home country provides export subsidies. What is the effect of such subsidy on the terms of trade of Home? Explain it...
From the previous question, suppose the US imposes a $2,000 tariff on each car. Further, suppose...
From the previous question, suppose the US imposes a $2,000 tariff on each car. Further, suppose that domestic quantity demand falls by 200 and domestic quantity supplied rises by 200. What is the new quantity of imports? How does a tariff harm societal welfare? Previous question: Suppose, the world price for cars is $10,000. Further, the US has a quantity demand at that price of 1,000 cars, and a quantity supplied of 200. How many cars will the US import...
2. Suppose a small country like Gambia imposes a tariff on its imports of Cloth from...
2. Suppose a small country like Gambia imposes a tariff on its imports of Cloth from the USA. A. What will happen to domestic price of cloth in the Gambia? Will it increase or decrease? Explain why? B. Who will be happy with the imposition of the tariff on imports domestic consumers or domestic producers in Gambia? Explain why? C. Why will the government of Gambia be happy with the imposition of the tariff? Explain, why?
Suppose that Congress imposes a tariff on imported steel to protect the U.S. steel industry from...
Suppose that Congress imposes a tariff on imported steel to protect the U.S. steel industry from foreign competition. Describe in detail the effect this would have on the consumer surplus, the producer surplus, and the total surplus. Make sure to explain why these changes occur.
(2) Derive an offer curve for Kenya, which produces tea and cotton. (3) How do Offer...
(2) Derive an offer curve for Kenya, which produces tea and cotton. (3) How do Offer Curves help in determining the Terms of Trade (TOT)? (Assume that Kenya trades with Egypt, and Kenya exports tea). (4) Under free trade, what are the effects on the volume of trade and TOT if Kenya imposes import duties on cotton from Egypt? Give clear explanations as well as diagrams
The United States has imposed a tariff of 51% on soft wood imports from Canada. The...
The United States has imposed a tariff of 51% on soft wood imports from Canada. The tariff caused imports of lumber to drop precipitously after only a few months. Additionally, the price of lumber rose significantly after only a few months. 1st attempt Part 1 (1 point) See Hint Who benefited from this tariff? Choose one or more: A. U.S. soft wood producers B. Canadian soft wood producers C. U.S. soft wood consumers D. non-Canadian foreign soft wood producers Part...
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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT