What is the import price and calculate the tariff revenue

Assignment Help International Economics

Reference no: EM131479734

Question: Assume that Thailand and India are potential trading partners of China. Thailand is a member of ASEAN but India is not. Suppose the import price of textiles from India (PIndia) is 50 per unit under free trade and is subject to a 20% tariff. As of January 1st 2010, China and Thailand entered into the China-ASEAN free-trade area, eliminating tariffs on Thai imports. Use the following figure to answer these questions:

a. Before the China-ASEAN free-trade area, how much does China import from each trading partner? What is the import price? Calculate the tariff revenue.

b. After the China-ASEAN free-trade area, how much does China import from each trade partner? What is the import price? What is the total tariff revenue of China?

c. Based on your answer to part (b), what is the impact of the China-ASEAN free-trade area on the welfare of China?

d. What is the effect of the China-ASEAN free-trade area on the welfare of Thailand and India?

e. As mentioned in the Headlines: ChinaASEAN Treaty Threatens Indian Exporters, the China-ASEAN agreement may lead to a similar one between China and India. How would this affect China's imports from each country? What would be the effect on welfare in China, Thailand, and India if such an agreement was signed?

Reference no: EM131479734

Questions Cloud

What is change in government revenue compared with nafta : Redraw the graph of trade diversion (Figure) with the S'Mex curve intersecting the MUS curve between points A and D.

What happens in stages d e m for a store instruction sw : Assume that registers are written in the 1st half of the clock cycle. Write the RTL code describing what happens in stages D, E, M for a store instruction SW.

Own version of the medical fields hippocratic oath : When Warren Burger calls upon Lawyers to make up their own version of the medical field's Hippocratic Oath,

Assess southwest airlines strategic approach to hrm : Assess Southwest Airlines' strategic approach to human resource (HR) management. Determine how its strategy increases organizational effectiveness.

What is the import price and calculate the tariff revenue : Assume that Thailand and India are potential trading partners of China. Thailand is a member of ASEAN but India is not. Suppose the import price of textiles.

Which e-recruiting media and methods would you recommend : How would you use these methods to market the job to potential candidates? How will you differentiate and position the job in the job market?

Review three of the results of your search : Review three of the results of your search. Next, propose three ways that an organization can increase diversity within itself.

Identify an operational activity within your organization : Identify an operational activity within your organization, or an organization with which you are familiar.

About the internal analysis of an organization : Describe what you think about the internal analysis of an organization.

User Account

All Pages