The figure below represents the domestic market for wheat in a small country. Imports of wheat are prohibited. Price ($ per bushel) $180 $160 0 40 60 C) $300 million. 120 OD) $2.2 billion. 150 Sa (domestic supply curve) - World price With an export subsidy of $20 per bushel, the production effect of the export subsidy amounts to OA) $1 billion. OB) $200 million. Da (domestic demand curve) Quantity (millions of bushels)
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- price supply domestic price- $35 import price + tarif $20 demand 100 300 500 650 850 quantity Based on the graph above, if there is a tariff of $15 per unit imposed on imports in this market: A. 750 units will be imported and tariff revenue to the government will be $11.250 B. 650 units will be imported and tariff revenue to the government will be $9,75O C. 350 units will be imported and tariff revenue to the government will be $5.250 D. 300 units will be imported and tariff revenue to the government will be $4,500The figure below represents the domestic market for wheat in a small country. Imports of wheat are prohibited. Price ($ per bushel) Sa (domestic supply curve) $180 $160 World price Da (domestic demand curve) 150 Quantity (millions of bushels) 40 60 120 With an export subsidy of $20 per bushel, the production effect of the export subsidy amounts to $1 billion. $2.2 billion. O $300 million. $200 million.3 1190 Domestic Demand E 1140 1090 PRICE (Dollars per ton) 1040 990 940 890 840 790 740 690 0 10 20 + I 1 1 R 30 40 50 60 70 QUANTITY (Tons of limes) A tariff set at this level would raise $ F If Zambia is open to international trade in limes without any restrictions, it will import % Domestic Supply 5 T Suppose the Zambian government wants to reduce imports to exactly 40 tons of limes to help domestic producers. A tariff of achieve this. G 1 I 6 P. 80 90 100 W Y in revenue for the Zambian government. H & 7 ? U 8 00 J tons of limes. Grade It Now 9 K O per ton will Save & Continue Continue without eaving O P
- Figure 7-1 Price $54 30 24 0 R S V W X Y % Q₁ Q₂ US Supply O Q0 O Q1 World price Quantity of leather footwear Figure 7-1 shows the U.S. demand and supply for leather footwear. Q2 US Demand Refer to Figure 7-1. Suppose the government allows imports of leather footwear into the United States. What will be the quantity of imports? OQ2Q0PRICE (Dollars per tonne) 1160 Domestic Demand 1110 1060 1010 960 910 860 810 760 710 660 0 20 40 60 80 100 120 140 160 180 QUANTITY (Tonnes of oranges) and is represented by the horizontal black line. satisfy domestic demand as much as possible before any exporting or importing takes place. price of oranges and that there are no transportation or transaction costs associated Domestic Supply A tariff set at this level would raise $ PW 200 If Zambia is open to international trade in oranges without any restrictions, it will import Suppose the Zambian government wants to reduce imports to exactly 40 tonnes of oranges to help domestic producers. A tariff of $ tonnes of oranges. in revenue for the Zambian government. per tonne will achieve this. Q Search this course_____ means selling the products at a price less than the ongoing price in the market. a. Quota b. Subsidy c. Dumping d. Tariff
- Figure 7-2 Price (dollars per pound) US supply $3.00 250 Pw+ Tari World price, Pw u.S. demand 175 0.500 45 Quantity of coffee (millions of pounds) 15 24 30 36 Suppose the US. government imposes a $0.75 per pound tariff on coffee imports. Figure 7-2 shows the impact of this tariff. Refer to Figure 7-2. With the tariff in place, the United States O imports 30 million pounds of coffee. O imports 12 million pounds of coffee exports 36 million pounds of coffee O imports 24 million pounds of coffeeThe following graph shows the domestic supply of and demand for soybeans in Guatemala. The world price (Pw) of soybeans is $540 per ton and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of soybeans and that there are no transportation or transaction costs associated with international trade in soybeans. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. TRICKY YALL 855 820 PRICE (Dollars per ton) 785 750 715 680 645 610 575 540 Domestic Demand 105 0 40 A Domestic Supply Pu NO 120 160 200 240 260 320 340 400 QUANTITY (Tons of soybeans) If Guatemala is open to international trade in soybeans without any restrictions, it will import Suppose the Guatemalan government wants to reduce imports to exactly 160 tons of soybeans to help domestic producers. A tariff of tons of soybeans. per16. What is the difference between an agricultural export subsidy and an agricultural production subsidy?
- 7. Suppose Home is a small exporter of wheat. At the world price of $100 per ton, Home growers export 10 tons. Now suppose the Home government decides to support its domestic producer with an export subsidy of $50 per ton. Use the following figure to answer these questions. Home Price 150 120 100 50 15 20 25 35 40 45 Quantity a. What is the quantity exported under free trade and with the export subsidy? b. Calculate the effect of the export subsidy on consumer surplus, producer surplus, and government revenue. c. Calculate the overall net effect of the export subsidy on Home welfare.0 suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place 905Domestic Demand Domestic Supply 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Tons of soybeans) If Colombia is open to international trade in soybeans without any restrictions, it will import tons of soybeans Suppose the Colombian government wants to reduce imports to exactly 100 tons of soybeans to help domestic producers. A tariff of $ 0 will achieve this A tariff set at this level would raise $ in revenue for the Colombian governmentThe figure below illustrates the impact of an export subsidy as imposed by a large country. No imports are permitted. Price Domestic price with subsidy World price World price with subsidy Di So Quantity The consumption effect of the export subsidy is shown by area(s) d. Ob. O (d +i+ j). O (b +f+ g).