Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel....

   

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Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. 30. Refer to Scenario 9-1. If trade in peaches is allowed, the price of peaches in the United States a. will increase, and this will cause consumer surplus to decrease. b. will decrease, and this will cause consumer surplus to increase. c. will be unaffected, and consumer surplus will be unaffected as well. d. could increase or decrease or be unaffected; this cannot be determined. Figure 9-15 Price per Saddle P₂ P₁ 0 G с 1 1 D I b. P₁ and Q4. c. P₂ and Q₂2. d. P; and Q₁. 1 Q1 Q₂ 8 E Q3 Qe Domestic Supply Tariff World Price Domestic Demand Quantity of Saddles 31. Refer to Figure 9-15. With trade and without a tariff, the price and domestic quantity demanded are a. P₁ and Q₁. 32. Both tariffs and import quotas a. increase the quantity of imports and raise the domestic price of the good. b. increase the quantity of imports and lower the domestic price of the good. c. decrease the quantity of imports and raise the domestic price of the good. d. decrease the quantity of imports and lower the domestic price of the good. 33. A common argument in favor of restricting trade a. concerns the strategy of bargaining. b. is that efforts should be made to get new industries started. c. emphasizes the belief that all countries should play by the same rules. d. All of the above are correct. Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. 30. Refer to Scenario 9-1. If trade in peaches is allowed, the price of peaches in the United States a. will increase, and this will cause consumer surplus to decrease. b. will decrease, and this will cause consumer surplus to increase. c. will be unaffected, and consumer surplus will be unaffected as well. d. could increase or decrease or be unaffected; this cannot be determined. Figure 9-15 Price per Saddle P₂ P₁ 0 G с 1 1 D I b. P₁ and Q4. c. P₂ and Q₂2. d. P; and Q₁. 1 Q1 Q₂ 8 E Q3 Qe Domestic Supply Tariff World Price Domestic Demand Quantity of Saddles 31. Refer to Figure 9-15. With trade and without a tariff, the price and domestic quantity demanded are a. P₁ and Q₁. 32. Both tariffs and import quotas a. increase the quantity of imports and raise the domestic price of the good. b. increase the quantity of imports and lower the domestic price of the good. c. decrease the quantity of imports and raise the domestic price of the good. d. decrease the quantity of imports and lower the domestic price of the good. 33. A common argument in favor of restricting trade a. concerns the strategy of bargaining. b. is that efforts should be made to get new industries started. c. emphasizes the belief that all countries should play by the same rules. d. All of the above are correct.

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