Government subsidy expenditure

Assignment Help Microeconomics
Reference no: EM133124394

Suppose the world price of corn, P*, is higher than Mexico's autarky price, and Mexico currently offers its corn producers an export subsidy $s/unit. Use a domestic-market graph to:

a) Show the effect of removing the export subsidy on Mexico's domestic price, domestic supply, domestic demand, export quantity, consumer surplus, producer surplus, and government expenditure assuming that Mexico is a small country;

b) Assuming that consumers are also taxpayers that used to pay for the government's subsidy expenditure in the above graph, identify the change in consumer surplus due to the removal of the export subsidy.

*Please make sure to graph

Reference no: EM133124394

Questions Cloud

Practice responsible service of alcohol : Explain one of the methods we can use to practice responsible service of alcohol in licenced venue:
Create the international monetary fund : 1. All of the following can be classified as earnings from "invisible" exports except:
What is total consumption : In 2030 in the country FARMLAND , there are three residents: The Farmer, The Miller, and The Baker. The residents of FARMLAND import and export goods to and fro
Effect of country a tariff removal : Suppose a large country A initially imposed a tariff on its imports and is now considering removing its tariff. Use a domestic-market graph to:
Government subsidy expenditure : Suppose the world price of corn, P*, is higher than Mexico's autarky price, and Mexico currently offers its corn producers an export subsidy $s/unit. Use a dome
How would the effect on domestic consumer surplus change : Suppose the United States provides a production subsidy to its import-competing producers of solar panels (a product the United States imports). For simplicity,
Implementing an ai agent in the controllers : Intelligent Coordination among Multiple Traffic Intersections Using Multi-Agent Reinforcement Learning
How many firms will produce in the home market in autarky : a. How many firms will produce in the home market in autarky? How much output for each firm? What is the price per barrel?
Reflect on mental models of innovation : Critique and evaluate potentially innovative solutions with reference to models of innovation, measures of success and examples

Reviews

Write a Review

Microeconomics Questions & Answers

  Discuss about technological change in blu-ray production

Explain how technological change in Blu-ray production might support the prediction of lower prices in the long run. Illustrate your explanation with a graph.

  What is the level of profit maximising output

Using the marginal approach to maximise profits, find the price that monopolist would charge to maximise its profit. What is the level of profit maximising output?

  How does firm performance affect ceo compensation

How does the gap between CEO pay and the average employee pay affectfirm performance? How does firm performance affect CEO compensation beyond what average employees make?

  Is there positive externality in production of antibiotics

A newspaper article states: While the notion of directly subsidizing drug companies may be politically unpopular in many quarters, proponents say it is necessary to bridge the gap between the high value that new antibiotics have for society and th..

  Preference relation monotone

Is Chen's preference relation monotone? exhibiting diminishing MRS? smooth? having vertically parallel indifference curves?

  Should firms in the x industry increase price

How did company X incorporate business ethics into their human resource policies - should firms in the X industry increase their price?

  The dual banking system in the US. today refers

The dual banking system in the U.S. today refers to: Most economists agree that the target rate of inflation for the central banks should be: One argument for an independent central bank is: Comparing the European and the U.S. central bank syatems, t..

  Discuss proposition that governments should neither praised

Discuss the proposition that governments should neither be praised for all successes, nor blamed for all failures.

  Define the severe poverty

If you had only $14 to spend per day (the U.S. poverty threshold), how would you spend it? What if you had only $2 a day.

  Determine the inefficient allocation of resources

Regulation is often justified in cases where some form of market failure would otherwise cause inefficient allocation of resources.

  Compute the fitted value and the residual for each point

Fora sample of 12 trees, the volume of lumber (in m3 ) and the diameter (in cm) at a fixed height above ground level was measured. Compute the fitted value and the residual for each point.

  Is gdp the best measure of growth?

Is GDP the best measure of growth?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd