Small country quota Suppose Canada places a quota on the import of steel, which reduces its...

Small country quota

Suppose Canada places a quota on the import of steel, which reduces its steel imports but does not stop them completely.

a) Draw a diagram to illustrate the change in Canada’s steel market, moving from free trade to the quota.

b) Based on your diagram, compare Canada’s welfare if it distributes the quota by auction with Canadian welfare if the quote is distributed by a VER.

Expert Solution

Rahul Sunny answered 2 years ago

Small country quota Suppose Canada places a quota on the import of steel, which reduces its...

Small country quota Suppose Canada places a quota on the import of steel, which reduces its steel imports, but does not stop them completely. a) Draw a diagram to illustrate the change in Canada’s steel market, moving from free trade to the quota. b) Based on your diagram, compare Canada’s welfare if it distributes the quota by auction with Canadian welfare if the quote is distributed by a VER.

Suppose that the Malaysian government is considering whether to impose an import tariff or quota to...

Suppose that the Malaysian government is considering whether to impose an import tariff or quota to protect domestic automobile industry. As an advisor, what are your advice to the government? Please analyse the similarities and differences between import tariff and import quota when there is a reduction in supply for the product. Use appropriate diagram/s to demonstrate your answers.

Q3. Which is a more restrictive trade barrier—an import tariff or an equivalent import quota? Why...

Q3. Which is a more restrictive trade barrier—an import tariff or an equivalent import quota? Why did the U.S. government in 1982 provide import quotas as an aid to domestic sugar producers?

A) Why US is having an import quota of sugar and what is its impact on...

A) Why US is having an import quota of sugar and what is its impact on US domestic production? B) What is the impact of an import quota on the sugar price in US and why consumers are not opposing this? Explain in detail.

Suppose the price of import good is 20 dollar before tariff, and now a small country...

Suppose the price of import good is 20 dollar before tariff, and now a small country posted a 10% tariff on this product. As the results, the production of this product of this small country increase from 1000 to 1200. And the import of this product decreased from 600 to 200 units. a. What is the change of producer's surplus? b. What is the change of consumer's surplus? c. What is the total tariff revenue? d. What is the total...

d) Canada is a “small” country in the global market for strawberries since its production or...

d) Canada is a “small” country in the global market for strawberries since its production or consumption levels do not affect world price. The world price for strawberries is $10 per box. If trade is allowed, calculate producer surplus, consumer surplus and total surplus for strawberries in Canada? QD = 600 – 20P QS = -150 + 30P

Suppose there is an import quota on sugar. The inverse demand for sugar is P=100-2QD. The...

Suppose there is an import quota on sugar. The inverse demand for sugar is P=100-2QD. The inverse supply for sugar is P=20+2QS. The world price (Pw)= 30 usd/lb. There is a quota set at 20 million/lbs of sugar. P is in Usd/lb. A) What is the purpose of this policy? B) Create a graph to demonstrate the impact of the sugar import quota. Include labels and units on both axis. C) Explain the consequences of this policy, and who supports...

Suppose that the government imposes quota of 70% of the current import amount. Do the following:...

Suppose that the government imposes quota of 70% of the current import amount. Do the following: a. Plot a graph to show the effects of the quota. b. Show the new areas of consumer surplus, producer surplus, and any other relevant areas. c. Show the deadweight losses due to the quota. d. Who wins and who loses from the quota?

Explain the import quota policy in a small nation, using appropriate theories and diagrams. Why WTO...

Explain the import quota policy in a small nation, using appropriate theories and diagrams. Why WTO substantially limits the legal usage of Import quotas.

Suppose a country with an inflation targeting regime announces a new anti-inflation program which reduces the...

Suppose a country with an inflation targeting regime announces a new anti-inflation program which reduces the inflation expectations in the medium and long term. What will happen to the value of domestic currency and the long end of the yield curve after this announcement?

Question

Small country quota Suppose Canada places a quota on the import of steel, which reduces its...

Solutions

Expert Solution

Related Solutions

Small country quota Suppose Canada places a quota on the import of steel, which reduces its...

Suppose that the Malaysian government is considering whether to impose an import tariff or quota to...

Q3. Which is a more restrictive trade barrier—an import tariff or an equivalent import quota? Why...

A) Why US is having an import quota of sugar and what is its impact on...

Suppose the price of import good is 20 dollar before tariff, and now a small country...

d) Canada is a “small” country in the global market for strawberries since its production or...

Suppose there is an import quota on sugar. The inverse demand for sugar is P=100-2QD. The...

Suppose that the government imposes quota of 70% of the current import amount. Do the following:...

Explain the import quota policy in a small nation, using appropriate theories and diagrams. Why WTO...

Suppose a country with an inflation targeting regime announces a new anti-inflation program which reduces the...