Econ Problem sets
Below is a graph of the market for sugar in the United States. (assume US is a small country) The World Price of Sugar is 80. USE ONLY NUMBERS ON THE GRAPH
- How much sugar is imported with freetrade?
- If a quota of 200 is placed on sugar imports how much sugar isimported?
- What is the price of sugar in the US with the
- What is the value of the windfall profits created with the
- On the graph show the dead weight loss created by the
- How is the quota different for Americans than atariff?
- A per unit tariff of how much would have the same static protective effect to AmericanProducers?
- Supposethere are many world sellers of sugar but a small number of buyers of raw sugar in the US (this is the case as most sugar is bought from the world producers by a hand full of American food producers or grocery stores for retail distribution). Who will capture the windfall profit and why?
- If the government wants to capture the windfall profits of a quota what should theydo?
- During a booming or growing economy which provides more protection a quota or tariff? Andwhy？
- Below is the market for corn in a small country. The world price of corn is 10 and is largely determined by supply and demand in the United States. The US congress decides that they want to increase subsidies to corn farmers. This causes US production to rise which lowers the world price to 9. Show precisely on the graph how much consumer surplus changes and how much producer surplus changes
- Below is market for Wine in the Small Country of Slovenia. US supply/Price of wine is 5. French supply/Price of wine is 6. Before joining the EU Slovenia had placed a tariff of 2 on all wine
- How much wine is consumed before joining theEU?
- How much wine is consumed after joining theEU?
- How much govt. revenue does the wine trade generate before joining theEU?
- How much govt. revenue does the wine trade generate after joining theEU?
- What is consumer surplus before joining theEU?
- What is consumer surplus after joining theEU?
- What is producer surplus before joining theEU?
- What is producer surplus after joining theEU?
- Does total welfare for Slovenia rise orfall?
- What is the Change in total welfare orsurplus
- Draw the domestic supply and demand for pencils in a small country. Label the autarky price and quantity and assign values of $2 and 1000.
- Now add to your graph a world price supply curve with a world price of$1.
- Label With Free trade how much is produced domestically and how much is demanded
- Show what happens to consumer
- Show what happens to producer
- Does free trade raise total surplus? And by Howmuch?