Suppose New Zealand is open to free trade in the world market for maize. Since New Zealand is small relative to the international market, the demand for and supply of maize in New Zealand have no impact on the world price. The following graph shows the domestic market for maize in New Zealand. The world price of a ton of maize is Pw = $800. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). (?) PRICE (Dollars per ton) 1150 Domestic Demand 1100 1050 1000 950 900 850 800 750 700 + 650 0 5 10 15 Domestic Supply 20 25 30 35 QUANTITY (Tons of maize) Pw 40 45 50 F CS Because New Zealand participates in international trade in the market for maize, it will import PS Use the following graph to show the effects of the $50 tariff. Now suppose the New Zealand government decides to impose a tariff of $50 on each imported ton of maize. Under the tariff, the price New Zealand consumers pay for a ton of maize becomes $ and New Zealand will import tons of maize. tons of maize.

Suppose New Zealand is open to free trade in the world market for maize. Since New Zealand is small relative to the international market, the demand for and supply of maize in New Zealand have no impact on the world price. The following graph shows the domestic market for maize in New Zealand. The world price of a ton of maize is Pw = $800. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). (?) PRICE (Dollars per ton) 1150 Domestic Demand 1100 1050 1000 950 900 850 800 750 700 + 650 0 5 10 15 Domestic Supply 20 25 30 35 QUANTITY (Tons of maize) Pw 40 45 50 F CS Because New Zealand participates in international trade in the market for maize, it will import PS Use the following graph to show the effects of the $50 tariff. Now suppose the New Zealand government decides to impose a tariff of $50 on each imported ton of maize. Under the tariff, the price New Zealand consumers pay for a ton of maize becomes $ and New Zealand will import tons of maize. tons of maize.

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 8PA

See similar textbooks

Similar questions

Suppose Jordan is open to free trade in the world market for maize. Since Jordan is small relative to the international market, the demand for and supply of maize in Jordan have no impact on the world price. The following graph shows the domestic market for maize in Jordan. The world price of a ton of maize is Pw = $800. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). PRICE (Dollars per ton) 1280 1220 1160 1100 1040 980 920 860 800 740 680 0 Domestic Demand 25 50 Domestic Supply PIN 75 100 125 150 175 200 225 250 QUANTITY (Tons of maize) CS PS ? Because Jordan participates in international trade in the market for maize, it will import tons of maize. Q Search
Suppose Guatemala is open to free trade in the world market for wheat. Since Guatemala is small relative to the international market, the demand for and supply of wheat in Guatemala have no impact on the world price. The following graph shows the domestic market for wheat in Guatemala. The world price of a ton of wheat is Pw = $400. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). (?) PRICE (Dollars per ton) 1200 1100 1000+ 900 800 700 600 500 400 300- 200 0 Domestic Demand 20 40 Domestic Supply 60 80 100 120 140 QUANTITY (Tons of wheat) PW 160 180 200 A CS T PS Because Guatemala participates in international trade in the market for wheat, it will import tons of wheat. Now suppose the Guatemalan government decides to impose a tariff of $200 on each imported ton of…
Suppose Bangladesh is open to free trade in the world market for maize. Because of Bangladesh's small size, the demand for and supply of maize in Bangladesh do not affect the world price. The following graph shows the domestic maize market in Bangladesh. The world price of maize is Pw PW=$350 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer's surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producers' surplus (PS). 710 A Domestic Demand Domestic Supply 670 CS 630 590 550 PS 510 470 430 390 PM 350 A 310 3 6. 12 15 18 21 24 27 30 QUANTITY (Thousands of tons of maize) If Bangladesh allows international trade in the market for maize, it will import tons of maize. Now suppose the Bangladeshi government decides to impose a tariff of $40 on each imported ton of maize. After the tariff, the price Bangladeshi consumers pay for a ton of…
Suppose Zambia is open to free trade in the world market for soybeans. Since Zambia is small relative to the international market, the demand for and supply of soybeans in Zambia have no impact on the world price. The following graph shows the domestic market for soybeans in Zambia. The world price of a ton of soybeans is PW = $250. Use the following graph to show the effects of the $ 10 tariff. Use the black line (plus symbol) to indicate the world price plus the tariff. Then, use the green points (triangle symbols) to show the consumer surplus with the tariff and the purple triangle (diamond symbols) to show the producer surplus with the tariff. Lastly, use the orange quadrilateral (square symbols) to shade the area representing government revenue received from the tariff and the tan points (rectangle symbols) to shade the areas representing deadweight loss (DWL) caused by the tariff.
The following graph shows the market for wheat in the European Union (EU). The world price of wheat is $4.00 per bushel, so Sworld represents the world supply assuming that the EU cannot affect the world price of wheat. To support the agricultural sector, the EU guarantees a certain price for the farmers by imposing a variable levy of $4.00 per bushel to limit the import of wheat. On the graph, use the purple line (diamond symbol) to show the support price the farmers receive due to the variable $4.00 levy. Note: Select and drag the line segment from the palette to the graph. Then select a point on the line segment and drag it to its desired position. PRICE (Dollars per bushel) 20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0 DEU SEU SWorld 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 WHEAT (Bushels) Before the levy After the levy Support Price SWorld New Fill in the following table by entering the quantities for production, consumption, and imports of wheat in the EU…
Country X does not allow imports of clothing. In its equilibrium without trade, a sweater costs $20 and the equilibrium quantity is 3 million sweaters. One day, the president decides to open the market to international trade. The market price of a sweater falls to the world price of $16. The number of sweaters consumed in Country X rises to 4 million, while the number of sweaters produced declines to 1 million. a) illustrate in a graph the situation just described. Your graph should show all the numbers. b) Calculate the change in consumer surplus, producer surplus, and total surplus that results from opening up trade.
The graph to the right depicts the relative world demand and supply curves for flowers. Home currently exports the labor intensive flowers and Foreign exports the land intensive soybeans. The current equilibrium in the market occurs at point X Recall that the relative quantity of flowers is computed as (Q,+Q,)/(a+a). while the relative price of flowers is computed P,/P Suppose that Home places an import tariff on soybeans. 1.) Using the line drawing tool, draw the new relative demand curve. Label it RD, 2.) Using the line drawing tool, draw the new relative supply curve. Label it RS, 3.) Using the point drawing fool, plot the new market equilibrium point indicating the new terms of trade Label the point Z. Carefully follow the instructions above and only draw the required objects. The impact on the terms of trade of an import tariff depends on OA. how large of a tariff is placed on the good. B. how many countries produce the good. OC. the number of units of the good available, D. how…
Suppose Kenya is open to free trade in the world market for wheat. Because of Kenya's small size, the demand for and supply of wheat in Kenya do not affect the world price. The following graph shows the domestic wheat market in Kenya. The world price of wheat is Pw =$250 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). (? 490 Domestic Demand Domestic Supply 460 CS 430 400 370 PS 340 310 280 Pw 250 220 190 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of tons of wheat) If Kenya allows international trade in the market for wheat, it will import tons of wheat. Now suppose the Kenyan government decides to impose a tariff of $60 on each imported ton of wheat. After the tariff, the price Kenyan consumers pay for a ton of wheat is s and Kenya will import tons of…
Attempts 0.5 3. Tariffs Suppose Bangladesh is open to free trade in the world market for oranges. Because of Bangladesh's small size, the demand for and supply of oranges in Bangladesh do not affect the world price. The following graph shows the domestic oranges market in Bangladesh. The world price of oranges is Pw = $800 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). PRICE (Dollars per ton) 1280 1220 1160 1100 1040 980 920 860 800 740 680 0 Keep the Highest 0.5 / 2 Domestic Demand 2 wala Domestic Supply 4 6 8 10 12 14 16 QUANTITY (Thousands of tons of oranges) 18 20 Show the effects of the $60 tariff on the following graph. CS If Bangladesh allows international trade in the market for oranges, it will import PS Now suppose the Bangladeshi government…
Suppose Guatemala is open to free trade in the world market for oranges. Because of Guatemala’s small size, the demand for and supply of oranges in Guatemala do not affect the world price. The following graph shows the domestic oranges market in Guatemala. The world price of oranges is PWPW=$800 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). 1. If Guatemala allows international trade in the market for oranges, it will import _____ tons of oranges. 2. Now suppose the Guatemalan government decides to impose a tariff of $120 on each imported ton of oranges. After the tariff, the price Guatemalan consumers pay for a ton of oranges is _____ and Guatemala will import _____ tons of oranges. 3. Show the effects of the $120 tariff on the following…
5. Welfare effects of a tariff in a small country Suppose Kenya is open to free trade in the world market for wheat. Because of Kenya's small size, the demand for and supply of wheat in Kenya do not affect the world price. The following graph shows the domestic wheat market in Kenya. The world price of wheat is Pw=$250 per ton. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer's surplus (CS) when the economy is at the free-trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producers' surplus (PS). PRICE (Dollars per ton) 490 460 430 400 370 340 310 280 250 220 190 + 0 Domestic Demand 5 Domestic Supply 10 15 20 25 30 35 QUANTITY (Thousands of tons of wheat) 40 P 50 If Kenya allows international trade in the market for wheat, it will import Show the effects of the $60 tariff on the following graph. CS PS tons of wheat. Now suppose the Kenyan government decides to impose a tariff of $60…
3. Welfare effects of a tariff in a small country Suppose Kenya is open to free trade in the world market for wheat. Because of Kenya's small size, the demand for and supply of wheat in Kenya do not affect the world price. The following graph shows the domestic wheat market in Kenya. The world price of wheat is PWPW = $250 per tonne. On the following graph, use the green triangle (triangle symbols) to shade the area representing consumer surplus (CS) when the economy is at the free trade equilibrium. Then, use the purple triangle (diamond symbols) to shade the area representing producer surplus (PS). If Kenya allows international trade in the market for wheat, it will import tonnes of wheat. Now suppose the Kenyan government decides to impose a tariff of $60 on each imported tonne of wheat. After the tariff, the price Kenyan consumers pay for a tonne of wheat is , and Kenya will import tonnes of wheat. Show the effects of the…