Effect of export subsidy on international price and quantity

Assignment Help Financial Econometrics

Reference no: EM131212617

Consider the case of an export subsidy for an importing country that has some monopsony power-that is, the case in which the foreign supply-of-exports curve is upwardsloping. Use a graph like that in given figure:

a. In comparison with free trade, what is the effect of the export subsidy on the international price and the quantity traded?

b. The importing country now imposes a countervailing duty that returns the market to the initial free-trade quantity traded. In comparison with the market with just the export subsidy, explain why the countervailing duty is good for the world. Explain why the countervailing duty can also increase the well-being of the importing country.

2447_Figure- Export subsidy, Large country, Exportable Product.jpg

Reference no: EM131212617

Questions Cloud

What does this imply about the value of the resistor : On schematics, you will frequently see a 1000 resistor listed as 1.0 k Ω. What does this imply about the value of the resistor?

What strategy should the eu governments follow : In the Airbus-versus-Boeing example in given Figure, what strategy should the EU governments follow if the upper-left box gives Airbus and Boeing each a sure gain of 5.

Define phototropism and gravitropism : Discuss the difference between growth and turgor movement in plants. Define phototropism and gravitropism, and explain the fundamental mechanisms of each movement. Indicate why studying tropisms are important for plant science.

Provide a rationale for choosing this category : Select one category from the completed World View Chart. Provide a rationale for choosing this category. Describe the selected content and explain the significance of the selected category across the religions studied.

Effect of export subsidy on international price and quantity : What is the effect of the export subsidy on the international price and the quantity traded? - Explain why the countervailing duty can also increase the well-being of the importing country.

Review stockholders equity section in your chosen company : HI5001 Accounting for Business Decisions - Review the stockholders' equity section in your chosen company's most recent year-end balance sheet and compare that with the previous year-end balance sheet. Compare percentage increase or decrease.

Describe how human activities impact global warming : What is global warming? Describe how human activities impact global warming. Explain what an individual can do to minimize his/her contribution to global warming.

If the united states paid exporters a subsidy : Would the United States gain from the combination of the export subsidy and import tariff? Would Canada? Explain.

Reverse mortgages marketing strategies : Which parties are impacted by reverse mortgages marketing strategies? If you are a bank hoping to increase profits, would you try to expand your marketing of reverse mortgages to seniors?

User Account

All Pages