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8 . Import quotas Kazakhstan is an apple producer as well as an importer of apples. Suppose this graph shows Kazakhstan's domestic market for apples,

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8 . Import quotas Kazakhstan is an apple producer as well as an importer of apples. Suppose this graph shows Kazakhstan's domestic market for apples, where S is the supply curve and D is the demand curve. The free trade world price of apples (Pw) is $120 per tonne. Suppose Kazakhstan's government restricts imports of apples to 150,000 tonnes. The world price of apples is not affected by the quota. Use the black line (plus symbol) to indicate the price of apples in Kazakhstan with the quota. Next, select and drag shaded regions from the palette to the graph. To resize the shaded regions, select one of the points and move it to the desired position. Use the purple points (diamond symbols) to shade the area that represents the effect of the quota on producer surplus (PS). Use the beige points (rectangle symbols) to shade the area that represents the change in foreign producer revenue. Lastly, use the black points (plus symbols) to shade the area, or areas, representing the deadweight loss (DWL) that results from the quota. Note: Select and drag shaded regions from the palette to the graph. To resize the shaded regions, select one of the points and move it to the desired position. (? 280 + 280 240 Price with Quota PRICE (Dollars per tonne) 220 200 Change in PS 180 S D 160 Change in Foreign Producer Revenue 140 120 DWL 100 30 60 80 120 150 180 210 240 270 300 QUANTITY (Thousands of tonnes)10 . Current, financial, and capital accounts Consider hypothetical balance-of-payments data for Canada presented in the following table. Complete the following table by selecting the correct value for each missing entry. Balance of Payments (Billions of dollars) Current Accounts Canadian merchandise exports +90 Canadian merchandise imports -68 Merchandise trade balance Canadian service exports +70 Canadian service imports Services balance +35 Goods and services balance +57 Net investment income from abroad -2 Net unilateral transfers -8 Current account balance Financial Accounts Change in Canadian-owned assets abroad -34 Change in foreign-owned assets in Canada +39 Financial account balance Statistical discrepancy -52 Net balance 0

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