Find the difference in welfare between free trade and

Reference no: EM13394134

Your last assignment brings you to work with the government of Sweden on textile markets. Sweden is fully integrated into the textile world market and the world market price for textiles is 0.50 Euro. Your analyst has summarized for you the domestic supply and demand functions for textiles in Sweden:

Table:

Supply Q = -5 + 20P

Demand Q = 40 - 20P

a) Given the world market price, what quantities of textiles are produced and consumed in Sweden?

b) Calculate the consumer and producer surplus at their initial equilibrium levels. (NOTE: Although not required, it may be helpful to draw a graph).

c) The government of Sweden plans to implement a tariff of 0.50 Euro on every unit imported. With the tariff implemented, what quantity of textiles would be produced and consumed assuming Sweden is a "small country" in the textile market? (Again, drawing a graph may be helpful).

d) What is the size of consumer surplus, producer surplus and total tariff revenues with the tariff?

e) What is the difference in welfare between the free trade and tariff regimes? Given this quantity, would you recommend that the government of Sweden implement the tariff or not?

Reference no: EM13394134

Questions Cloud

What can we conclude about existence of economies or : a study of 86 savings and loan associations in six northwestern states yielded thefollowing cost function c 2. 38 2.84

Tinbergen cans expects sales next year to be 50000000 : tinbergen cans expects sales next year to be 50000000. inventory and accounts receivable combined will increase 8000000

Ix is a specialized packaging company that packages other : ipx is a specialized packaging company that packages other manufacturers products. other manufacturers ship their

A proposed engineering control is expected to cut the : a proposed engineering control is expected to cut the accident rate by 40 percent for a given process that was recently

Find the difference in welfare between free trade and : your last assignment brings you to work with the government of sweden on textile markets. sweden is fully integrated

When searching for a supplier which of the following : 1.which group is experiencing the fastest population growth today?2.what is the second stage of the consumer buying

You have a product in which inventory is taken frequently : 1 in cases where demand is difficult to predict which probability models would you use so that the risk associated with

Haywood company sells a single product with a contribution : haywood company sells a single product with a contribution margin of 5 per unit fixed costs of 74400 and sales for the

Should acme make a deal if its policy is to never exceed a : acme is also considering the acquisition of a firm in the czech republic and would like your opinion on this. it plans

User Account

All Pages