ECN HMW11-S21

Refer to Figure 9-11. Consumer surplus in this market after trade is

A + B + D.

Refer to Figure 9-15. Producer surplus with the tariff is

C + G.

Refer to Figure 9-15. As a result of the tariff, there is a deadweight loss that amounts to

D + F.

Figure 9-22 - The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. Refer to Figure 9-22. Suppose the government imposes a quota of 600. The wealfare loss due to the quota will be

$12,000.

Figure 9-22The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. Refer to Figure 9-22. Suppose the government imposes a tariff of $20 per unit. The amount of revenue collected by the government from the tariff is

$12,000.

Scenario 9-2• For a small country called Boxland, the equation of the domestic demand curve forcardboard is,where represents the domestic quantity of cardboard demanded, in tons, and represents the price of a ton of cardboard.• For Boxland, the equation of the domestic supply curve for cardboard is,where represents the domestic quantity of cardboard supplied, in tons, and againrepresents the price of a ton of cardboard. Refer to Scenario 9-2. Suppose the world price of cardboard is $45. Then Boxland's gains from international trade in cardboard amount to

$122.50.

Refer to Figure 6-10. A price floor set at

$16 will be binding and will result in a surplus of 10 units.

Assume that Qd = 80-2P and Qs = 2P-20 and the market is in equilibrium. If the government imposes a price ceiling at $15 in this market, what is the loss in producer surplus?

$200

Refer to Figure 9-13. Consumer surplus before trade is

$3,600.

Refer to Figure 6-10.1. If the government imposes a quota of 14, the price of imports

$4

Refer to Figure 6-21. What is the amount of the tax per unit?

$4

Refer to Figure 9-12. Equilibrium price and equilibrium quantity without trade are

$42 and 1,200.

Figure 9-4. The domestic country is Nicaragua. Refer to Figure 9-4. The change in total surplus in Nicaragua because of trade is

$625, and this is an increase in total surplus.

Refer to Figure 6-12. When the price ceiling applies in this market and the supply curve for gasoline shifts from S1 to S2,

a surplus will occur at the new market price of P2.

Refer to Figure 6-16. In this market, a minimum wage of $2.75 is

binding and creates unemployment.

Refer to Figure 6-11. If the government imposes a price floor at $10, it would be

binding if market demand is Demand A and non-binding if market demand is Demand B.

The demand for salt is inelastic, and the supply of salt is elastic. The demand for caviar is elastic, and the supply of caviar is inelastic. Suppose that a tax of $1 per pound is levied on the sellers of salt, and a tax of $1 per pound is levied on the buyers of caviar. We would expect that most of the burden of these taxes will fall on

buyers of salt and the sellers of caviar.

Figure 9-3. The domestic country is China. Refer to Figure 9-3. With trade, China will

export 250 pencil sharpeners.

If the government removes a binding price floor from a market, then the price received by sellers will

increase, and the quantity sold in the market will increase.

Refer to Figure 6-30. In which market will the majority of the tax burden fall on buyers?

the market shown in panel (b).