Eco_1_problem_set_5

Eco_1_problem_set_5 - growers in this country long protected from global competition have had a great run at the expense of just about everyone

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Eco 1 Spring 2008 Problem Set 5 1) Refer to the following graphs a) What are Consumer and Producer Surplus under Autarky (i.e. no trade)? What are they under international trade? b) Is there a shortage of domestic production under international trade? If so, how much is imported and what is its value (i.e. what is Total Revenue for foreign firms in the domestic market)?
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Eco 1 Spring 2008 Problem Set 5 Suppose the government imposes a tariff on imports, thereby raising the world price. c) Complete the table below. Without Tariff With Tariff Quantity supplied by Domestic firms Quantity demanded by consumers Quantity imported Area of Consumer Surplus Area of Producer Surplus Area of tax revenue Area of Foreign firms' revenue Area of Deadweight Loss 3) According to an editorial in the New York Time, because of the sugar quota, “Sugar
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Unformatted text preview: growers in this country, long protected from global competition, have had a great run at the expense of just about everyone else – refineries, candy manufacturers, other food companies, individual consumers and farmers in the developing world.” Briefly explain how each group mentioned in this editorial is affected by the sugar quota. Eco 1 Spring 2008 Problem Set 5 4) Refer to the following graph for the domestic market for kumquats. Price Quantity US Demand US Supply A C H D I J K E F B G $1.00 $0.75 4 6 12 13 Suppose an import quota of “6” is imposed. Complete the following table. Without Quota With Quota World price of kumquats US price of kumquats Quantity supplied by US firms Quantity demanded by US consumers Area of Consumer Surplus Area of Producer Surplus Area of Deadweight Loss...
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This homework help was uploaded on 04/09/2008 for the course ECON 001 taught by Professor Caseyquinn during the Spring '08 term at Lehigh University .

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Eco_1_problem_set_5 - growers in this country long protected from global competition have had a great run at the expense of just about everyone

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