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- 1. Your textbook discusses the benefits of cheaper imports on pages 171-173. Draw a graph that shows the effects on consumer and producer surplus (gain or loss) that result from a country importing a good. 2. Recently, China placed tariffs on the importation of US soybeans. Assume that the domestic market for soybeans in China is described by the following equations: Demand: P = 115 – 1/15Q Supply: P = 55 + 1/15Q Where P is Yuan per bushel of soybeans and Q is 10 million bushels per year. The world price for soybeans is ¥65/bushel. Graph the soybean market in China showing equilibrium both with no barriers to trade and with a ¥15/bushel tariff. Be sure to fully and clearly label the graph including the Domestic Demand curve, Domestic Supply curve, the World Price, and the Price with tariffs. 3. How many bushels of soybeans can the US export to China if there are no tariffs? How many bushels with the imposed tariff? 4. Who are the greatest benefactors of China’s…Explain how an export subsidy is theoretically meant to work. Think of the application to “infant industryGraphically explain the negative effects of quotas. How about subsidies? Label and explain results in detail.
- Why does the efficiency of an import tariff depend on the price elasticity of demand?When the government charges a domestic seller for each unit of a good or service sold, we call that a tariff. an income tax. a subsidy. an excise tax.What would be the effects of imposing a quota on imported cars from Japan? Explain the effects for the American consumers and producers.
- Menggunakan graf yang sesuai huraikan kesan cukai eksport dan subsidi eksport. Using an appropriate graph explain the effect of export tax and export subsidy.The figure below illustrates the impact of an export subsidy as imposed by a large country. No imports are permitted. Price aib f D D₁ h So Si Sa Da O The producer surplus falls by area (a + b). O The producer surplus increases by area (a + b +c+d). The producer surplus falls by area (a+b+c+e+f+g+h). O The producer surplus increases by area (a + b + c). Domestic price with subsidy World price World price with subsidy Quantity What is the net impact on the producer surplus of the export subsidy provided by the domestic government?Analyze with the help of a graph how an export subsidy affects the terms of trade of the country providing the subsidy. Is the export subsidy desirable from the perspective of overall social welfare of the country? Explain.