Question
I need help urgently please with number 3&4 only I already solved 1 and 2 and the answer is listed as you may need it
I need help urgently please with number 3&4 only I already solved 1 and 2 and the answer is listed as you may need it after adding the tariff.
Table 1: shows the supply and demand schedule of leather belts for Singapore, a small nation that is unable to affect the World price of leather belts. Table 1: Supply and Demand for Leather Belts: Singapore
Price | Supply | Demand |
0 | 0 | 32 |
5 | 2 | 30 |
10 | 4 | 28 |
15 | 6 | 26 |
20 | 8 | 24 |
25 | 10 | 22 |
36 | 12 | 20 |
45 | 14 | 18 |
50 | 16 | 16 |
55 | 18 | 14 |
1) Assume that Italy and China can supply leather belts to Singapore at a price of $20 and $25, respectively. In the presence of free trade, which nation exports leather belts to Singapore, how many leather belts does Singapore consume and import?
My answer:Singapore will import from Italy as produce=demand=8, consume=demand=24, import= 24-8=16
2) Suppose Singapore levies an 80 percent nondiscriminatory tariff on its leather belts imports. Which nation exports leather belts to Singapore? How many leather belts will Singapore produce, consume, and imports?
My answer:
the new prices after adding 80%=
Italy= 36, supply=12, demand=20, import= 8
China= 45, supply=14, demand=18, import=4
3) suppose Singapore forms a customs union with China. Determine the trade creation effect and the trade diversion effect of the customs union. What is the customs union's overall effect on the welfare of Singapore?
4) Assume instead that Singapore forms a customs union with Italy. Is this a trade diverting or trade creating customs union? By how much does the customs union increase or decrease the welfare of Singapore?
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