ECON HELP REQUIRED! MUCH APPRECIATE THE HELP. d) What will be the welfare effect

Question

ECON HELP REQUIRED! MUCH APPRECIATE THE HELP.

d) What will be the welfare effect of the tariff in doliors? (Hint: it will be easiest to calculate the deadwelaht losses directly) PART 1 The figure below represents the market for oranges In Natlon A. Suppose A ls a small country and the world price for oranges is $1 e) How much is the tariff revenue (in dollors)? S1. Suppose instead that Nation A decldes to Impose an Import quota of 30 oranges f) Now what will be the amount of oranges consumed, produced domestically and imported in Naion A? What will be the price of oranges? In this case, what will be the quota rents? What would the role of import licenses have in this case? What would br the difference between an import quota af 30 and a Valuntary Export Restraint al h) of 30? l Suppose demand for oranges is expected to increase in Nation A. What would trade policy instrument wauld local producer prefer, a quota or a tariff WHY? 40 50 60 70 80 a a) Find the autarky equillbrlum (ok, the picture Isn't very exact, but you should be able to find, mare or less, quantity consumed and produced domestically, and price]. b) With free trade, what will be the equilibrium amount of oranges consumed, produced domestically, and imported in Nation A? Suppose Nation A imposes a 100% tariff on oranges. c)Now what will be the amount of oranges consumed, praduced damestically and imported in Nation A

Explanation / Answer

a) Under autarky there is no trade therefore equilibrium is where the supply and demand curve intersects.

Equilibrium: Q =30 and Price = 3

b) With trade the price in the economy will be Price =1. At this price Qty demanded is where Price = 1 line intersects the demand curve. So Qd = 70. Quantity produced domestically is where the price line P= 1 cuts the supply curve. Qs = 10. Import = Qd-Qs = 70-10 = 60.

c)With 100% tariff world price will be 2.

Now orange consumed will be = 50. Produced domestically will be = 20. Import = 50-20 = 30.

d) The welfare will decrease by the amount of deadweight loss.

DWL = 0.5(10)*(1) + 0.5*(20)*(1) = 15 units.

*For solution to other parts please post as a separate question. Can do only four subparts at a time.

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

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