lec15-eco101-11

lec15-eco101-11 - InternationalTrade Lecture15 c...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon

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

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

Unformatted text preview: InternationalTrade Lecture15 c Marc-AndreasMuendler UniversityofCalifornia,SanDiego November17,2011 15.CostsandBenefitsofTradeRestrictions Econ101, c M.Muendler EffectsofaTariffinaSmallorLargeCountry WhenHomeisa small countryandimposesatariff,thereisanin- creaseindomesticpricebutworld-marketpricesremainunaffected Unambiguouswelfarelossingeneralequilibrium. Unambiguoussurpluslossinpartialequilibrium WhenHomeisa large countryandimposesatariff,theincreasein domesticpriceislessthanthetariffincreaseasforeignpricefalls Possiblewelfaregainingeneralequilibrium. Possiblecompensationofsurpluslosswithtariffrevenueinpartial equilibrium 15.CostsandBenefitsofTradeRestrictions Econ101, c M.Muendler TariffonHomeImportsinaSmallCountry D o m e s t ic P r ic e . P Home Demand and Supply D,Q Home Market 15.CostsandBenefitsofTradeRestrictions Econ101, c M.Muendler EffectsofaTariffonTwoLargeCountries Twolargecountriestradewitheachother Homeimposesaspecifictariff oneveryunitoftheimportgood Foreignshipperswillonlysellthegoodifthepricedifferencebetween HomeandForeignisatleast Afterthetariffisimposed,Homedomesticprice P differsfromFor- eigndomesticprice P * by : P * + = P . 15.CostsandBenefitsofTradeRestrictions Econ101, c M.Muendler TariffonHomeImportswhenbothcountriesarelarge P * Foreign Demand and Supply W o r ld P r ic e D ,Q * * . P W P Home Demand and Supply W o r ld P r ic e D,Q . Home Import Demand, Foreign Export Supply MD=D-Q, D * XS=Q - * Home Market Foreign Market World Market 15.CostsandBenefitsofTradeRestrictions Econ101, c M.Muendler TariffonHomeImportswhenbothcountriesarelarge P * Foreign Demand and Supply W o r ld P r ic e D ,Q * * . P W P Home Demand and Supply W o r ld P r ic e D,Q . Home Import Demand, Foreign Export Supply MD=D-Q, D * XS=Q - * Home Market Foreign Market World Market Q (P) * W A * D (P) * W Q(P) W D(P) W A XS(P)=Q (P)-D (P) W * W * W MD(P)=D(P)-Q(P) W W W XS(P) W MD(P) W A A * MD=XS P W P W t { 15.CostsandBenefitsofTradeRestrictions15....
View Full Document

This note was uploaded on 01/30/2012 for the course ECON 101 taught by Professor Jacobson during the Fall '03 term at UCSD.

Page1 / 21

lec15-eco101-11 - InternationalTrade Lecture15 c...

This preview shows document pages 1 - 8. Sign up to view the full document.

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