Question 2 Suppose that the demand for rice in Japan is given by the function Q = 100-p and the domestic supply is Q = p. Suppose that the inverse world supply function is p = 30. (a) What would be the change in domestic producer surplus if imported rice is banned? (b) What would be the change in consumer surplus if a $5 tariff is imposed on imported rice? (c) What would be the change in imports if a $5 tariff is imposed on imported rice?
Question 2 Suppose that the demand for rice in Japan is given by the function Q = 100-p and the domestic supply is Q = p. Suppose that the inverse world supply function is p = 30. (a) What would be the change in domestic producer surplus if imported rice is banned? (b) What would be the change in consumer surplus if a $5 tariff is imposed on imported rice? (c) What would be the change in imports if a $5 tariff is imposed on imported rice?
Chapter21: International Trade
Section: Chapter Questions
Problem 6QP
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![Question 2
Suppose that the demand for rice in Japan is given by the function Q = 100 -p and the
domestic supply is Q = p. Suppose that the inverse world supply function is p = 30.
(a) What would be the change in domestic producer surplus if imported rice is banned?
(b) What would be the change in consumer surplus if a $5 tariff is imposed on imported
rice?
(c) What would be the change in imports if a $5 tariff is imposed on imported rice?
(d) What would be the smallest tariff to completely eliminate imported rice?
(e) A $5 per unit tariff has the same effect on producer and consumer surplus as a quota of](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F23ed9169-ccd7-4282-8651-4390fc55e573%2Fdbeaafa6-fed8-4224-b605-8c3635a55517%2Fpbzr1c9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 2
Suppose that the demand for rice in Japan is given by the function Q = 100 -p and the
domestic supply is Q = p. Suppose that the inverse world supply function is p = 30.
(a) What would be the change in domestic producer surplus if imported rice is banned?
(b) What would be the change in consumer surplus if a $5 tariff is imposed on imported
rice?
(c) What would be the change in imports if a $5 tariff is imposed on imported rice?
(d) What would be the smallest tariff to completely eliminate imported rice?
(e) A $5 per unit tariff has the same effect on producer and consumer surplus as a quota of
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