Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need help with these 4 microeconomics questions: Question 10. Tariffs and Quotas (1.2 marks) Use the following information to answer the questions below. The

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

I need help with these 4 microeconomics questions:

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
Question 10. Tariffs and Quotas (1.2 marks) Use the following information to answer the questions below. The domestic demand and domestic supply behavior for MP4 players in a small closed economy are given by the following functions: Supply: P = 3QS+2 Demand: P = - QD+ 102 I. Closed Economy (no trade) Question 1 (0.2 points) Calculate the value of consumer surplus (CS) and producer surplus (PS) for the MP4 player market in this small closed economy. CS =$[Blank 1], PS = $[Blank 2]. Round off your answer to two decimal places. Graph A: MP4 Player Market (no trade) 125 Supply. P = 3Qs + 2 102 100 75 Price 50 Demand: P = - Qd + 102 25 ON O 20 25 40 Quantity Blank # 1 Blank # 2Il. Open Economy to Free Trade. Use the following information to answer questions a) ~ d). Suppose that this small closed economy is open to free trade and that the world price is $62 per MP4 player. Graph B: MP4 Player Market (w/free trade) 125 Supply: P = 3Qs + 2 102 Price 100 77 75 Pw = 62- 50 Demand: P = - Qd + 102 25 ON O 20 25 40 QuantityQuestion 2 (0.4 points) a-d. a. What is the quantity supplied by domestic producers? [Blank 1] b. What is the quantity demanded by domestic consumers? [Blank 2] c. How many MP4 players will the country import or export with free trade in play? They will [Blank 3: type either "import" or "export"] [Blank 4] units. d. Shade the area of the consumer surplus (CS) and producer surplus (PS) after the economy opens to free trade on Graph B above. Calculate the value of consumer surplus (CS) and producer surplus (PS). CStrade = [Blank 5] and Pstrade =[Blank 6] Blank # 1 Blank # 2 Blank # 3 Blank # 4 Blank # 5 Blank # 6Ill. Open Economy to Trade (with Tariff) Use the following information to answer questions a) ~ i). Suppose that the government enforces a tariff of $6 on each imported MP4 player, and the world price is $62 per MP4 player. Graph C: MP4 Player Market (w/Tariff) 125 Supply: P = 3Qs + 2 Price 102 100 77 75 Ptariff = 68 Pw = 62 50 Demand: P = - Qd + 102 25 ON 0 Qsdom = ? 20 25 Od = ?40 QuantityQuestion 3 (0.3 points) Round off your answer to the nearest integer a. What is the quantity supplied by domestic producers after the tariff's implementation? [Blank 1]. b. What is the quantity demanded by domestic consumers after the tariff's implementation? [Blank 2]. c. How many MP4 players will the country import or export after the tariff's implementation? [Blank 3; type either "import" or "export"] [Blank 4] units d. Calculate the value of consumer surplus (CS) and the value of producer surplus (PS) for the MP4 player market after implementing the tariff. CS w/Tariff = [Blank 5] PS w/Tariff = [Blank 6] . e. Calculate the value of total tariff revenue. Tariff Revenue = [Blank 7]. f. Calculate the dead weight loss. DWL = [Blank 8]. g. Rank the consumer surplus (CS) for the three scenarios below from the highest to the lowest: Option 1: the MP4 player market without trade. Option 2: the MP4 player market with free trade. Option 3: the MP4 player market with the tariff. Highest: Option [Blank 9: type either "1","2",or"3"] Lowest: Option [Blank 10: type either "1","2",or"3"] h. Rank the producer surplus (PS) for the three scenarios below from the highest to the lowest: Option 1: the MP4 player market without trade. Option 2: the MP4 player market with free trade. Option 3: the MP4 player market with the tariff. Highest: Option [Blank 11: type either "1","2",or"3"] Lowest: Option [Blank 12: type either "1","2",or"3"] Blank # 1 Blank # 2 Blank # 3 Blank # 4 Blank # 5 Blank # 6 Blank # 7 Blank # 8 Blank # 9 Blank # 10 Blank # 11 Blank # 12 IV. Open Economy to Trade (w/Quota) Use the following information to answer question a) ~ j). Suppose that the government introduces a quota allowing imports of 8 units instead of introducing tariffs. Suppose that the world price is $62 per MP4 player. Graph D: MP4 Player Market (w/Quota) 125 Supply: P = 3Qs + 2 Price 102 100 8 18 75 Pw = 62. 50 Demand: P = - Qd + 102 25 ON 0 20 25 40 QuantityQuestion 4 (0.3 points) Round off your answer to the nearest integer a. What is the quantity demanded by domestic consumers after the quota's implementation? [Blank 1]. b. What is the quantity supplied by domestic producers after the quota's implementation? [Blank 2]. c. How many MP4 players will the country import or export after the quota's implementation? [Blank 3: type either "import" or "export"] [Blank 4] units. d. Calculate the value of consumer surplus (CS) and the value of producer surplus (PS) for the MP4 player market after introducing the quota. CS w/Quota = [Blank 5]. PS w/Quota = [Blank 6]. e. Determine the value of total license holder revenue. License Holder Revenue = [Blank 7]. f. Determine the dead weight loss. DWL = [Blank 8]. g. Rank the consumer surplus (CS) for the three scenarios below from the highest to the lowest: Option 1: the MP4 player market without trade. Option 2: the MP4 player market with free trade. Option 3: the MP4 player market with the quota. Highest: [Blank 9: type either "1", "2", or "3"]. Lowest: [Blank 10: type either "1", "2", or "3"]. h. Rank the producer surplus (PS) for the three scenarios below from the highest to the lowest: Option 1: the MP4 player market without trade. Option 2: the MP4 player market with free trade. Option 3: the MP4 player market with the quota. Highest: [Blank 11: type either "1", "2", or "3"]. Lowest: [Blank 12: type either "1", "2", or "3"]. i. If the government wants to use the quota policy to attain the equilibrium quantity equal to the domestic quantity demanded under the $6 tariff policy in a), what should the quota be set to in order to achieve this goal? Blank # 1 Blank # 2 Blank # 3 Blank # 4 Blank # 5 Blank # 6 Blank # 7 Blank # 8 Blank # 9 Blank # 10 Blank # 11 Blank # 12 Blank # 13

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles of Economics

Authors: Gregory Mankiw

7th edition

128516587X, 978-1285165875

More Books

Students also viewed these Economics questions

Question

How do you add two harmonic motions having different frequencies?

Answered: 1 week ago