pophw2-final

pophw2-final - ECON 333 SPRING 2008 POP HOMEWORK ASSIGNMENT...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ECON 333 – SPRING 2008 POP HOMEWORK ASSIGNMENT - II FEBRUARY 22 ND Q: Suppose that world price of a TV set is $200, but the price of a TV set in country A is $250. (Assuming that country A is small enough not to affect the world price) what must be the tariff rate if country A had imposed an ad valorem tariff? What must be the tariff rate if country A had imposed a specific tariff? A: The domestic price is $50 higher than the world price, which means the ad valorem tariff is 215%. (50/200=0.25.) The equivalent specific tariff is $50. LAST NAME INITIALS: THON FEBRUARY 25 TH Q: What is producer surplus? How does it change as the price rises? Using a graph, illustrate the consumer surplus, and the change in consumer surplus in response to a price increase. A: Consumer surplus is the difference between what consumers are willing to pay for a good and what they actually pay. Thus, it is an approximate measure of consumer welfare in a given market. In a graph, consumer surplus can be illustrated by the triangle below the demand curve
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 3

pophw2-final - ECON 333 SPRING 2008 POP HOMEWORK ASSIGNMENT...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online