This topic contains a solution. Click here to go to the answer

Author Question: The graph above shows a small country that can import at the world price of Pw and currently imports ... (Read 82 times)

javeds

  • Hero Member
  • *****
  • Posts: 570
The graph above shows a small country that can import at the world price of Pw and currently imports (Qd-Qs). Suppose that the government imposes quota of 80 of the current import amount (and suppose that this does not raise the domestic price so much that there will be no trade). Use the graph above to illustrate the effects of the quota. Show the new areas of consumer surplus, producer surplus, and any other relevant areas, and the deadweight losses due to the quota. Who wins and who loses from the tariff?
 
  What will be an ideal response?

Question 2

In China
 
  A) wages are beginning to rise, reducing its comparative advantage.
  B) there is little advantage from scale economies.
  C) the middle class is not expanding.
  D) poor coastal areas limit trade.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

hugthug12

  • Sr. Member
  • ****
  • Posts: 329
Answer to Question 1

See Figure 6.7 in the text. Consumer surplus decreases, and producer surplus increases, and total surplus falls, since there are deadweight losses. Consumers lose, producers win, and the country as a whole loses (since there are deadweight losses. The unclear piece of this analysis is what happens to the area that would have represented tariff revenue, for an equivalent tariff (area c in Figure 6.7). If the government auctions import licenses, this area goes to the government, and there is no difference from the analysis of a tariff. If import licenses are distributed to foreign producers, then area c is a loss to the domestic economy (although not to the world economy.

Answer to Question 2

A




javeds

  • Member
  • Posts: 570
Reply 2 on: Jun 30, 2018
:D TYSM


mochi09

  • Member
  • Posts: 335
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

Cucumber slices relieve headaches by tightening blood vessels, reducing blood flow to the area, and relieving pressure.

Did you know?

The types of cancer that alpha interferons are used to treat include hairy cell leukemia, melanoma, follicular non-Hodgkin's lymphoma, and AIDS-related Kaposi's sarcoma.

Did you know?

In Eastern Europe and Russia, interferon is administered intranasally in varied doses for the common cold and influenza. It is claimed that this treatment can lower the risk of infection by as much as 60–70%.

Did you know?

Though the United States has largely rejected the metric system, it is used for currency, as in 100 pennies = 1 dollar. Previously, the British currency system was used, with measurements such as 12 pence to the shilling, and 20 shillings to the pound.

Did you know?

Though Candida and Aspergillus species are the most common fungal pathogens causing invasive fungal disease in the immunocompromised, infections due to previously uncommon hyaline and dematiaceous filamentous fungi are occurring more often today. Rare fungal infections, once accurately diagnosed, may require surgical debridement, immunotherapy, and newer antifungals used singly or in combination with older antifungals, on a case-by-case basis.

For a complete list of videos, visit our video library