ECO 103 OF MACROECONOMICS (ECO-103-V03)

Forum: Ch.19 Discussion: Intl Trade

Americans buy 5,000 plywood boards for $20 each with 4,000 coming from Canada. Prez. Trump slaps a $10 tariff on any from Canada and with the tariff now 4,000 are sold for $30 each with half coming from Canada.

With the tariff . . . .

1. How much more do consumers pay for each?

2. How many less do they buy?

3. How much more in price USA suppliers get?

4. How many more do USA suppliers sell?

5. How much more do Canada suppliers get paid for each?

6. How many less do Canada suppliers sell?

7. What does the government get?

Later the tariff is lifted and Americans again buy 5,000 plywood boards for $20 each with 4,000 coming from Canada. Prez. Trump then slaps a 2000 unit quota on Canada with 4,000 being sold for $30 each.

With the quota . . . .

8. How much more do consumers pay for each?

9. How many less do they buy?

10. How much more in price USA suppliers get?

11. How many more do USA suppliers sell?

12. How much more do Canada suppliers get paid for each?

13. How many less do Canada suppliers sell?

14. What does the government get?

(below is a conceptual question not based on the above example and worth twice as much)

15 & 16. Explain your (unlike all the posts before yours) SINGLE best reason for restricting trade.