Question: PARTIAL EQUILIBRIUM MODEL with QUOTAS HOME: DemandP = 100 - QFOREIGNDemand P = 200 -Q Supply P = QSupply P = Q (3 points)(a) Suppose

PARTIAL EQUILIBRIUM MODEL with QUOTAS

HOME: DemandP = 100 - QFOREIGNDemand P = 200 -Q

Supply P = QSupply P = Q

(3 points)(a)Suppose the importer imposes a quota of 150 Units.Using the Excess demand and Supply curves, explain how the tariff affects world prices.Give the intuition.

(2 points)(b)What do we mean by a quota price?

(5 points)(c)Determine world prices with the quota and the impact on each country's Social Surplus.Recall that SS = CS + PS + quota revenue.

(4 points)(d)Show (graphically and mathematically) whether the importer gains from the import quota.Explain the basis for any gains or losses.

(6 points)(e)Suppose the exporter retaliated with an export tariff. What is their optimal export tariff?graphically or use calculations.In either case, explain your reasoning.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

:PARTIAL EQUILIBRIUM MODEL HOME: DemandP = 100 - QFOREIGNDemand P = 200 - 1/3 Q Supply P = QSupply P =1/3 Q (3 points)(a) Derive and depict in a figure the World Excess Supply and Demand Curves. Be...

PARTIAL EQUILIBRIUM MODEL HOME: DemandP = 100 - QFOREIGNDemand P = 200 - 1/3 Q Supply P = QSupply P =1/3 Q (3 points)(a) Derive and depict in a figure the World Excess Supply and Demand Curves. Be...

[3 points} [2 points} [5 points} Twocountry model with EXPORT QUOTA: use the functions above. As sume the importer does not impose an}:r tariff or quota. a} Suppose the exporter imposes an export...

QUOTAS DUE: Suppose we have the following demand and supply functions (taken from Assignment #2 and 3). HOME: Demand P= 100 - 1/2 Q Supply P = 1Q FOREIGN Demand P =200 - 2Q Supply P = 1/Q 1:...

Explain in details... Problem Set 6 Tariffs 1. The graph below shows domestic supply and demand for a good in a small country. Suppose that it faces a world price of the good of $4 per pound. Show...

Suppose we have the following demand and supply functions (taken from Assignment #2 and ]). HOME: Demand P = 100 - 4Q Supply P= 4Q FOREIGN Demand P =200 -2 Q Supply P= WQ 1: Two-country model with...

answer allk A firm produces output using the technology y = 1 1,000 KL1 2 , where capital, K, is measured in machine-hours, labor, L, is measured in person-hours, and y denotes the yearly output. The...

eco9 Read Case 5-1: Netflix on pages 181-182. Complete one of the following for your original post. Responses to peers can include additional examples from personal experience, additional support for...

rt On January 10th, 2022 Penny and Nicole entered into a single futures contract for May deliver of crude oil (Ticker CLK2, or CLK22.NYM). Penny took a short position and Nicole took a long position....

DigiTek is a start-up company financed with 50% debt and 50% shareholders' equity. The debt outstanding is a zero-coupon bond which has a face value of $1,000,000 and a remaining maturity of two...

i. You have been asked to establish a control network at UniSQ Toowoomba Campus for topographical mapping of campus area located near the Soccer field using an Automatic Level, a Total Station and...

Your firm values inventory using the AVCO method. At 1 June 20X7 there were 111 units in inventory valued at 10 each. On 12 June, 63 units were purchased for 12 each, and a further 72 units were...

A partner outside basis must be increased by any positive basis adjustment and decreased by any distributions true or orf

You have three bonds: A, B, and C. Bond A has a coupon rate of 10% and maturity of 10 years. Bond B has a coupon rate of 12% and maturity of 10 years. Bond C has the coupon rate of 12% and maturity...

=+ a. What must the saving rate be in the initial steady state? [Hint: Use the steady-state relationship, sy = ( + n + g)k.]

=+ a. The capitaloutput ratio is constant.

=+ e. What must the saving rate be to reach the Golden Rule steady state?