Has trade been created as a result of the customs union

Reference no: EM13763733

Suppose the U S faces the domestic situation in the market for wrist watches as depicted in the diagram below Assume the U.S is a "small" country in the market for wristwatches.

(A) What will be the price of a wristwatch in the U.S. in autarky?

(B) Suppose the U S opens up trade with two other countries, Canada and Switzerland. We can buy the same wristwatch from Canada for $30 and from Switzerland for $20. With free trade, from which country will the U.S. import wristwatches?

C) Now suppose the U.S. imposes a 100 percent ad valorem tariff on all imports of wristwatches.

(i) What will be the price of a wristwatch to U.S. consumers if it is imported from Canada?

(ii) What will be the price of a wristwatch to U.S. consumers if it is imported from Switzerland?

(iii) As a result. from which country will the U.S. import wristwatches now?

Suppose the U.S. and Canada form a customs union and together maintain the 100 percent ad valorem tariff on imports of wristwatches from Switzerland.

(i) From which country will the U.S. import wristwatches now? Why?

(ii) Has trade been created as a result of the customs union? If so, how?

(iii) Has trade been diverted as a result of the customs union? If so, how?

(iv) How can you tell whether the customs union is, on balance, beneficial to the U S?

Reference no: EM13763733

Questions Cloud

Write paper on each thinkers unique contributions to society : Write a 1,050- to 1,400-word paper to include the following: Information about each of the thinker's unique contributions to society.

The independent and dependent variables : Explain whether you have homogeneity of variance, and explain how you know. Explain why it is important to know if you have homogeneity of variance.

How is the technology implemented : How is the technology implemented? Funding (Did they receive grants? Where did the funds come from? How were funds allocated?)

Review the video the case against assistive technology : Review the following video, The Case Against Assistive Technology. Explain how your position on the use of assistive technology has evolved throughout this course.

Has trade been created as a result of the customs union : What will be the price of a wristwatch to U.S. consumers if it is imported from Canada - What will be the price of a wristwatch in the U.S. in autarky - Canada and Switzerland. We can buy the same wristwatch from Canada for $30 and from Switzerland ..

Principles of ethical decision making this rookie officer : Describe the three principles of ethical decision making this rookie officer will face in this situation

Write paper on the cost of justice : This paper is on "The Cost of Justice." Briefly research expenditures on corrections at the state and federal level and perform a cost/benefit analysis of the modern American conception of justice

Regulatory influences on discretionary benefits : Question 1: What are some of the legal and regulatory influences on discretionary benefits?

Issue and its impact of the population : Explain the managerial responsibilities related to administrative ethical issues. If none were stated, what should have been done?

User Account

All Pages