Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 40, Problem 4P
To determine
The domestic import export of the country at world price.
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Refer to Figure 3.6, page 55. Assume that the graph depicts the U.S. domestic market for corn. How many bushels of corn, if any, will the United States export or import at a world price of $1, $2, $3, $4, and $5? Use this information to construct the U.S. export supply curve and import demand curve for corn. Suppose the only other corn-producing nation is France, where the domestic price is $4. Which country will export corn; which will import it?
[India is the world’s largest consumer of sugar. Assume the world price for sugar is $750 per ton.]
[Assume India currently has a tariff of $50 per ton on sugar and imports 7 million tons of sugar. Show this situation in a graph. Label the quantity demanded and the quantity supplied domestically and imports clearly on a graph. Explain your graph in 3-4 sentences.
How to draw the graph?
[India is the world’s largest consumer of sugar. Assume the world price for sugar is $750 per ton.]
[Assume India currently has a tariff of $50 per ton on sugar and imports 7 million tons of sugar. Show this situation in a graph. Label the quantity demanded and the quantity supplied domestically and imports clearly on a graph. Explain your graph in 3-4 sentences.
2. [ Suppose India decides to remove the tariff, show the effect of this change on India’s imports on the graph. Clearly label the new domestic quantity demanded and the quantity supplied. You must use the same graph as you have drawn in answer to Part a to show this new scenario. How does this policy affect consumers, producers, and the government in India? You only have to state who benefits or harms from the policy.
3. [Label the areas in your graph and fill in the following table.
With Tariff
Free Trade (after the tariff is removed)
Consumer Surplus
Producer Surplus
Government…
Chapter 40 Solutions
Economics (Irwin Economics)
Ch. 40.2 - Prob. 1QQCh. 40.2 - Prob. 2QQCh. 40.2 - Prob. 3QQCh. 40.2 - Prob. 4QQCh. 40 - Prob. 1DQCh. 40 - Prob. 2DQCh. 40 - Prob. 3DQCh. 40 - Prob. 4DQCh. 40 - Prob. 5DQCh. 40 - Prob. 6DQ
Ch. 40 - Prob. 7DQCh. 40 - Prob. 8DQCh. 40 - Prob. 9DQCh. 40 - Prob. 10DQCh. 40 - Prob. 11DQCh. 40 - Prob. 12DQCh. 40 - Prob. 13DQCh. 40 - Prob. 14DQCh. 40 - Prob. 1RQCh. 40 - Prob. 2RQCh. 40 - Prob. 3RQCh. 40 - Prob. 4RQCh. 40 - Prob. 5RQCh. 40 - Prob. 6RQCh. 40 - Prob. 7RQCh. 40 - Prob. 8RQCh. 40 - Prob. 9RQCh. 40 - Prob. 10RQCh. 40 - Prob. 11RQCh. 40 - Prob. 12RQCh. 40 - Prob. 13RQCh. 40 - Prob. 1PCh. 40 - Prob. 2PCh. 40 - Prob. 3PCh. 40 - Prob. 4P
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