Question

1) The United States sugar industry has enjoyed trade protection for several years. As a result, sugar prices in the U.S. are

b. Suppose the world price for sugar is $0.12 per pound. If the U.S. opens itself up to trade, will the U.S. become an importc. Relative to a no-trade scenario, calculate the size of the change in consumer surplus and producer surplus when the U.S. oplease only do problem d e and f thanks!d. Now suppose that the U.S. government imposes a $0.06 per pound tariff on imported sugar. Draw a new graph that illustratese. Relative to a free trade scenario, calculate the size of the change in consumer surplus and producer surplus when the U.S.f. Does imposing a tariff on sugar result in a deadweight loss in this market? If so, label the relevant area(s) on your grap

0 0
Add a comment Improve this question Transcribed image text
Answer #1

A 0.15 BAD EN 0 10000 20000 30000 40000 50000

D) Imports at the world price = 30000-9000 = 21000

Imports at the world price+tariff = 24000-13500 = 10500

so, Imports decreases after the imposition of the tariff

E) CS under free trade = A+B+C+D+E+F = 0.5*30000*(0.42-0.12) = 15000*0.3 = 4500

CS under tariff = A+F = 0.5*24000*(0.42-0.18) = 2880

CS decreases by 4500-2880 = 1620

PS under free trade = G = 0.5*9000*(0.12-0) = 540

PS under tariff = B+G = 0.5*13500*(0.18-0) = 1215

PS increases by 1215-540 = 675

F) DWL = C+E = 0.5*(13500-9000)*0.06 + 0.5*(30000-24000)*0.06

= 135+180 = 315

Government revenue = D = 10500*0.06 = 630

Add a comment
Know the answer?
Add Answer to:
please only do problem d e and f thanks! 1) The United States sugar industry has enjoyed trade protection for several y...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 1) The United States sugar industry has enjoyed trade protection for several years. As a result,...

    1) The United States sugar industry has enjoyed trade protection for several years. As a result, sugar prices in the U.S. are higher than the average world price. Suppose that the domestic demand and domestic supply for sugar are as provided in the table below (assume continuous, linear domestic demand and supply curves which include the following data points for sugar): | Price ($ per Quantity Demanded Domestically Quantity Supplied Domestically pound) (Millions of Pounds per Year) (Millions of Pounds...

  • 1) The United States sugar industry has enjoyed trade protection for several years. As a result,...

    1) The United States sugar industry has enjoyed trade protection for several years. As a result, sugar prices in the U.S. are higher than the average world price. Suppose that the domestic demand and domestic supply for sugar are as provided in the table below (assume continuous, linear domestic demand and supply curves which include the following data points for sugar): | Price ($ per Quantity Demanded Domestically Quantity Supplied Domestically pound) (Millions of Pounds per Year) (Millions of Pounds...

  • 1. (40 points) Refer to the graph below to answer the following questions Home's Import-Competing Industry...

    1. (40 points) Refer to the graph below to answer the following questions Home's Import-Competing Industry Note: All curves are linear Price A Supply Po 100 B Pw 50E Demand 800 1300 1700 Quantity Home is a "small country" in this market. PD and Pw are and worldwide, respectively prices domestically (that is, in autarky) linear, what are the values of the price at the figure these a. Given that the demand and supply intercepts A and F? [Hint: There...

  • Question 11 of 16 > The figure describes the Laotian market for cheese where free trade...

    Question 11 of 16 > The figure describes the Laotian market for cheese where free trade is allowed. Suppose the world price of cheese is S6 per pound and that Laos imposes an import tariff of $2 per pound on foreign cheese. Move the price line to describe the new price with the tariff and place the consumer surplus (CS) and producer surplus (PS) areas to describe the new welfare situation Laotian market for cheese Donec supply Price of cheese...

  • Please explain why. Scenario 9-1 The before-trade domestic price of peaches in the United States is...

    Please explain why. Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. 30. Refer to Scenario 9-1. If trade in peaches is allowed, the price of peaches in the United States will increase, and this will cause consumer surplus to decrease b. will decrease, and this will cause consumer surplus to increase. will be...

  • #4. Assume that the United States, as a steel importing nation, is large enough so that changes in the quantity of its...

    #4. Assume that the United States, as a steel importing nation, is large enough so that changes in the quantity of its imports influence the world price of steel. The U.S. supply and demand schedules for steel are illustrated in the table below, along with the overall amount of steel supplied to U.S. consumers by domestic and foreign producers: Supply and Demand: Tons of Steel (United States) Quantity Supplied (Domestic (Sd)) Quantity Supplied (Domestic + World [Sd+w]) Quantity Demanded (Domestic...

  • A country imports 5 million pounds of sugar per year and domestically produces another 5 million...

    A country imports 5 million pounds of sugar per year and domestically produces another 5 million pounds. The world price of sugar is 25 cents per pound, and unlimited quantities of sugar are available at that price—the world supply curve of sugar is perfectly elastic. Assuming linear schedules, economists estimate the price elasticity of domestic supply to be 0.3 and the price elasticity of domestic demand to be 0.15 at the current equilibrium. a. Use the given price elasticity and...

  • fill in the blank 1)increase/decrease 2)increase/decrease 3)gain/loss Suppose New Zealand is open to free trade in...

    fill in the blank 1)increase/decrease 2)increase/decrease 3)gain/loss Suppose New Zealand is open to free trade in the world market for wheat. Because of New Zealand's small size, the demand for and supply of wheat in New Zealand do not affect the world price. The following graph shows the domestic wheat market in New Zealand. The world price of wheat is Pw = $250 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing...

  • This is one problem please answer the following 3. Welfare effects of a tariff in a...

    This is one problem please answer the following 3. Welfare effects of a tariff in a small country Suppose Bolivia is open to free trade in the world market for wheat. Because of Bolivia's small size, the demand for and supply of wheat in Bolivia do not affect the world price. The following graph shows the domestic wheat market in Bolivia. The world price of wheat is Pw - $250 per ton. On the following graph, use the green triangle...

  • please help with the whole problem. thank you the first and second drop down menu has...

    please help with the whole problem. thank you the first and second drop down menu has options of: increase or decrease. and the thrird drop down menu has an option of: gain or loss 1. Welfare effects of free trade in an exporting country Consider the New Zealand market for lemons. The following graph shows the domestic demand and domestic supply curves for lemons in New Zealand. Suppose New Zealand's government currently does not allow international trade in lemons. Use...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT