Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971509
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 7.1, Problem 1QQ
To determine
The consumer surplus and demand curve for turkey.
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The graph shows the car market in Mexico when Mexico places no restriction on the quantity of cars imported. The world price of a car is $10,000.
Suppose the government of Mexico introduces an import quota on imported cars of 4 million a year.
Draw a line that shows the effect of the import quota on supply. Label it S +
quota.
Label it.
Draw a point to show the quantity of cars bought in Mexico and the price paid.
When the government of Mexico introduces an import quota of 4 million cars, Mexico imports
nothing
million cars and produces
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Price ($)
The hypothetical country of Crabby Island has imposed a production quota of 4,000 crabs per month. Use the line segment in
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Figure: The Market for Oranges in South Africa
Price of |
oranges
Domestic
Ayddns
Pw
Domestic
demand
Quantity of oranges
(Figure: The Market for Oranges in South Africa) Use Figure: The Market for Oranges in South Africa. In
autarky, the price of oranges in South Africa is P1. When the economy is opened to trade, the price falls to Pw
and the change in total surplus is area:
O M+N+ 0+P.
O.
O+ P.
O M+N+O+ P+Q.
Chapter 7 Solutions
Principles of Macroeconomics (MindTap Course List)
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- The figure provided shows the market for calculators. Price of calculators $45 40- 30- 20 20 10 10 5 S world price with tariff world price D 50 100 200 300 400 500 600 700 800 900 Quantity of calculators After the $15 tariff is imposed, producer surplus is: $10,000. $3,000. $6,250. $2,000.arrow_forwardEconomics When a new tariff is placed on imported furniture, which of the following is expected to happen in the domestic market for furniture, all else being equal? a.Consumer surplus and producer surplus both increase. b.Consumer surplus decreases and producer surplus increases. c.Consumer surplus and producer surplus both decrease. d.Consumer surplus increases and producer surplus decreases.arrow_forwardЕОC 10.05 Japan imports crayons into its country; they are a price taker in this market. Suppose the world price of crayons is $5. If Japan imposes a $1 tariff on crayons, what would be the domestic price of crayons and what will happen to the quantity bought? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a The quantity bought will increase and the price will be $6. b The quantity bought will fall and the price will be $6. The quantity bought will fall and the price will be $4. d. The quantity bought will increase and the price will be $4.arrow_forward
- Suppose the European Union imposes trade sanctions (export quotas) on food sold to Russia. Imagine other nations do not increase their food exports to Russia. Which of the following does not happen? A. food prices increase in Russia B. consumer surplus declines in Russia C. food prices increase in the European Union D. export revenues decline in the European Unionarrow_forwardThe figure to the right shows the U.S. demand and supply for leather footwear. Under autarky, the consumer surplus is area OA. S + V OB. R. OC. S. OD. R+S+V. Price $54 30 24 0 R S V W Q TU X Y Q₁ Q₂ US Supply World price US Demand Quantity of leather footweararrow_forwardDraw a supply and Demand curve for Turkey. In equation show producer and consumer surplus. Explain why producing more turkeys would lower surplus???arrow_forward
- An early freeze in California sours the lemon crop. Explain what happens to consumer surplus in the market for lemons. Explain what happens to consumer surplus in the market for lemonade. Illustrate your answers with diagrams.arrow_forwardAnswer the following questions based on the graph that represents Kyle's demand for ribs per week at Big Ed's Barbecue. f. If the price of ribs rose to $10, what would happen to Big Ed's producer surplus? g. What is the total surplus in this market at a price of $10? h. If the price of ribs fell to $5, what would be Kyle's consumer surplus? j. What is the total surplus in this market at a price of $5?arrow_forwardwhich of the following is true? A. The gain of tariff revenue = area 1. B.The loss of consumer surplus is the sum of the areas 2 + 4. C. The gain of producer surplus = area 3. D. The loss of consumer surplus is the sum of the areas 1 + 2 + 3 + 4.arrow_forward
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