Reference no: EM131098501
The impact of a tariff
To see the Impact of a tariff, consider a hypothetical example of trade in wire hangers between the United States and China. For simplicity, assume that China is the only source of U.S. wire hanger imports. The following graph shows the U.S. market for wire hangers. Note that in the absence of any trade, the market price for hangers in the United States Is $40 per crate, and the equilibrium quantity Is 16,000 crates per week.
When the United States allows free trade in wire hangers with China, the price of hangers in the U.S. market is $20 per crate. At this price, the quantity of hangers supplied by U.S. producers is _______ crates per week; the quantity of hangers demanded by U.S. buyers is _______ crates per week, and the quantity of hangers imported by the United States from China each week is _______ crates of hangers.
Use the green triangle (triangle symbols) to show U.S. consumer surplus under free trade with China, and use the purple triangle (diamond symbols) to show U.S. producer surplus under free trade with China.
Suppose American hanger manufacturers convince the U.S. government that Chinese firms are selling hangers in the U.S. market at well below the cost of producing the hangers, a practice known as _________. In response to the accusations, the U.S. government puts a tariff of $10 per crate on hangers from China. The tariff increases the price of hangers from $20 to $30 per crate, as depicted on the following graph. Under the tariff, the United States' weekly imports of Chinese hangers _______to ________ crates per week.
Use the green triangle (triangle symbols) to shade the area that represents consumer surplus under the tariff, and use the purple triangle (diamond symbols) to shade the area that represents producer surplus under the tariff. Then use the red rectangle (cross symbols) to show the revenue that the U.S. government collects as a result of the tariff. Finally, use the tan triangles (dash symbols) to show the deadweight loss (DWL) from the imposition of the tariff.
As a result of the tariff, government revenues rise by _________________, producer surplus rises by ___________, but consumer surplus declined by ________________.
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Briefly describe depreciation method based on treating asset
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Demonstrates negativism
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By what amount should foxs capital account change
: In 20X1 the partnership sustained a $33,000 loss before interest and salaries to partners. By what amount should Fox's capital account change? $7,000 increase.
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Find the quantity of hangers supplied by us producers
: When the United States allows free trade in wire hangers with China, the price of hangers in the U.S. market is $20 per crate. At this price, the quantity of hangers supplied by U.S. producers is _______ crates per week
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Which of the following statements about a tariff is true
: A tariff increases consumer surplus, decreases producer surplus, increases revenue to the government, and increases total surplus.
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: What is the R-square of the regression - Can you forecast (predict) what happens to the average price of a house if the number of bedrooms increases from 3 to 4 (keeping everything else constant)?
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: Using the same production function as in question 4 {ie: q = (K^1/2 + L^1/2)^2} suppose that the firm is now operating in the long-run. Solve for the long-run cost function (i.e. total costs as a function of input prices and output).
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Which of the following statements about a tariff is true
: A tariff increases consumer surplus, decreases producer surplus, increases revenue to the government, and increases total surplus.
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