"The higher the tariff, the more domestic production is increased. Thus, a prohibitive tariff is socially...
"The higher the tariff, the more domestic production is increased. Thus, a prohibitive tariff is socially optimal." Explain whether or not this statement is valid.
Homework Answers
False
Tariff is imposed tax on the foreign imported items
If there is higher restriction then there will be more focus is on domestic production
But it doesn't mean that domestic production will always increased by providing the higher tariffs
It will actually cause problem for the economy and restrict itself to other foreign goods
This is also define as protectionism
The recent example of this is the US President Donald Trump put restriction on the many imported goods for the Welfare of its domestic producers but in the long run it is not socially optimal
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"The higher the tariff, the more domestic production is
increased. Thus, a prohibitive tariff is socially...
When the government imposes a tariff on import, what happens? A. The domestic price is higher...
When the government imposes a tariff on import, what happens? A. The domestic price is higher than the global price. B. The amount of import is less than that in free trade. C. There is tariff revenue to the government. D. all of the above While working for Pepsico, after examining the data closely, Jim noticed that when the price of a can of Mountain Dew increased, the number of cans of Mountain Dew sold decreased. He correctly reports that...
If the USA wants to reduce its imports (to promote domestic production) from China due to...
If the USA wants to reduce its imports (to promote domestic production) from China due to its trade deficit with China, compare which policy works more effectively, an import quota or an equivalent tariff? Reflect harder to compare the market adjustment by quota or tariff when domestic supply decreases due to a higher wage in a new labour contract. Use a graph to support your analysis.
suppose that the tariff on foreign-produced automobiles was increased. all else equal this would result in...
suppose that the tariff on foreign-produced automobiles was increased. all else equal this would result in which of the following statements begin correct? 1.the demand for foreign-produced automobiles would increase, causing the price of automobiles to increase in other nations. 2.the amount of unemployed workers in the domestic automobiles industry would rise 3. foreign countries would send fewer automobiles to the domestic country. the reduction in the supply of foreign automobiles to the domestic country would result in a higher...
True or False: explain your answer the nominal tariff on a commodity is higher than the...
True or False: explain your answer the nominal tariff on a commodity is higher than the nominal tariff on the imported input used in the production of the commodity, then the rate of effective protection is higher on the commodity than on the input.
Raising an existing tariff on grapes from Argentina will: a. increase domestic production of grapes. b....
Raising an existing tariff on grapes from Argentina will: a. increase domestic production of grapes. b. increase total American consumption of grapes. c. increase American consumption of domestically produced grapes. d. increase American imports of grapes from Argentina.
Import tariff in the case of domestic monopoly a) leads to a higher welfare than the equivalent quota b) leads to the lower domestic prices than in the case of free trade c) leads to a lower welfare t...
Import tariff in the case of domestic monopoly a) leads to a higher welfare than the equivalent quota b) leads to the lower domestic prices than in the case of free trade c) leads to a lower welfare than the equivalent quota d) leads to the same level of welfare than the equivalent quota
Suppose the U.S. seeks to drastically increase domestic steel production. The current world price for steel...
Suppose the U.S. seeks to drastically increase domestic steel
production. The current world price for steel is $300 per metric
tonne. To increase domestic steel production the U.S. applies a
tariff on all imported steel of $200 per metric tonne.
What is the price of a metric tonne of steel in the U.S. with
the tariff?
How does consumer surplus change with the tariff? Indicate the
change in consumer surplus using the letters provided.
How does producer surplus change with...
1. If both China and Nigeria set a tariff of 10% per unit of soybeans imported...
1. If both China and Nigeria set a tariff of 10% per unit of soybeans imported from the US, what would be your expectation owith respect to the domestic price of soybeans in China and Nigeria? a. Domestic price in China will rise by more than 10% while domestic price in Nigeria will rise by exactly 10% b. Domestic price in China will rise by less than 10% while domestic price in Nigeria will rise by more than 10% c....
1. Socially Optimal Thneed Production (Graphical Analysis) based on Dr. Seuss’ The Lorax. There is only...
1. Socially Optimal Thneed Production (Graphical Analysis) based on Dr. Seuss’ The Lorax. There is only one question, but it has several parts, (a) through (J), below, plus (k) and (l) for extra credit. The demand curve and supply curve for Thneeds (“A fine something that all people need,” according to the Once-ler Group’s web site) are given by QD= 100 –5P and QS = 2.5P – 5 [HINT: these are regular—that is economically sensible—demand and supply curves that say...
From the following figure, in which Dc and Sc refer, respectively to the domestic demand and...
From the following figure, in which Dc and Sc refer, respectively to the domestic demand and supply curves of cloth, and SF and SF+T refer, respectively, to the world supply curve of cloth under free trade and with an import quota of 40C imposed by the nation on the importation of cloth, determine: The consumption, production effect, and the trade effect of the import quota. The reduction in consumer surplus, the increase in producer surplus or rent, the import quota...
Suppose the U.S. seeks to drastically increase domestic steel
production. The current world price for steel is $300 per metric
tonne. To increase domestic steel production the U.S. applies a
tariff on all imported steel of $200 per metric tonne.
What is the price of a metric tonne of steel in the U.S. with
the tariff?
How does consumer surplus change with the tariff? Indicate the
change in consumer surplus using the letters provided.
How does producer surplus change with...
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