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International Economics question. Please show work and answer all parts. Thank you. Bonia and Ardon are small countries that protect their economic growth from rapidly
International Economics question. Please show work and answer all parts. Thank you.
Bonia and Ardon are small countries that protect their economic growth from rapidly advancing globalization by limiting the import of televisions to 20 million. To this end, each country imposes a different type of trade barrier when the world price (PW) is $2,000. In Borzia, the government decides to impose a tariff of $3,000 per television; in Arden, the government implements a quota of 20 million televisions. Assume that Bonia and Ardon have identical domestic demand (D0) and supply (S) curves for televisions as shown on the following graph. Under these conditions, the price of televisions is $5,000 per television in each country. ('2) 10000 - 9000 8000 7000 8 8 8 8 4000 3000 PRICE (Dollars per television) 2000 1000 D 10 20 3D 40 50 60 70 50 50 100 QUANTITY (Millions of televisions) Suppose that in both countries, demand for televisions rises from Do to D1 . Assuming Borzia keeps the tariff at $3,000 per television, complete the first row of the following table by calculating each of the values given this increase in demand. Assuming Arden maintains a quota of 20 million televisions, complete the second row of the table by calculating each of the values given this increase in demand. Price Quantity Demanded at New Price Imports Country (Dollars) ( Millions of televisions) (Millions of televisions) Borzia (tariff = $3,000) Ardon (quota = 20 million televisions) True or False: The increase in demand helps both domestic producers and consumers in Arden. True False Which of the following explain why a quota is a V restrictive trade barrier than an equivalent tariff. Check all that apply. .7. A foreign producer may offset the quota by the price reductions. .7. By foreclosing the market mechanism, a quota suppresses competition. -- A quota ensures the domestic industry a ceiling on importsStep by Step Solution
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