I need a detailed explanation for #18. Graph included 9.5.2. 17) Refer to Figure

Question

I need a detailed explanation for #18. Graph included 9.5.2.

17) Refer to Figure 9.5.2 above. Now suppose an import quota of 3000 trucks is imposed. The quota will otal consumer surplus equal to A) $25,000. B) $13,125,000.u C) $40,000,000.u 0,000· E) $75,625,000 Answer: D Diff: 2 Section: 9.35 fer to Figure 9.52 above. Now suppose an import quota of 3000 trucks is imposed. The quota will 18) Re make total domestic producer surplus equal to A) $2,500 B) $5,000 C) $5,000,000 D) $10,000,000. E) $30,000,000 Answer: C Diff: 2 Section: 9.5 19) Refer to Figure 9.5.2 above. Now suppose an import quota of 3000 trucks is imposed. Government revenue from the quota will be: B) $2,500 C) $7,500,000. D) $12,500,000 E) $13,125,000. Answer: A Diff: 1 Section: 9.5 o Figure 9.5.2 above. Now suppose an import quota of 3000 trucks is imposed. The quota will 20) Refer t decrease the revenue of foreign firms by: A) $O. B) $2,500. C) $7,500,000 D) $11,250,000,- E) $13,125,000. Answer: D Diff: 2 Section: 9.5

Explanation / Answer

Answer
The import quota increases price from 12500 to 15000
The import quota is the difference between quantity demanded at a price - supplied by domestic producer

=5000-2000=3000 at P=$15000

producer surplus is the area below price and above the supply curve
PS=0.5*(15000-10000)*20000=5000000
Option C

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.