Question

In: Economics

To produce a boat, you need wood as an intermediate good. If this country imports both...

To produce a boat, you need wood as an intermediate good. If this country imports both boats and wood, a 10% tariff rate can be imposed on boat imports, and a 5% tariff rate
can be imposed on wood imports. The price of a boat is $1000 before the tariff, and the price of one unit of wood is $100. Knowing that three units of wood are required to produce one boat.


(a) The value added before both tariffs are imposed =


(b) The value added after both tariffs are imposed =


(c) The value added after imposing a tariff on boats only =


(d) The value added after imposing the tariff on wood only =


(e) The effective rate of protection after imposing both tariffs =


(f) The effective rate of protection if only the tariff on boats is imposed =


(g) The effective rate of protection if only the tariff on wood is imposed =

Solutions

Expert Solution

Rahul Sunny answered 9 months ago
Next > < Previous

Related Solutions

Consider a small country (perfect competition) applying a tariff, t, to imports of a good a....
Consider a small country (perfect competition) applying a tariff, t, to imports of a good a. Suppose that the country currently has a tariff on imports, but decides to reduce it from t to t’. Draw graphs for the Home and import markets and illustrate this change. b. What happens to the quantity of goods produced at Home and their price? What happens to the quantity of imports? c. Are there gains or losses to domestic consumer surplus due to...
Suppose that country A and country B both produce wine and cheese. Country A has 800...
Suppose that country A and country B both produce wine and cheese. Country A has 800 units of available labor, while country B has 600 units. Prior to trade, country A consumes 40 pounds of cheese and 8 bottles of wine, and country B consumes 30 pounds of cheese and 10 bottles of wine. Country A Country B   Labor per pound cheese 10 10 Labor per bottle wine 50 30 a. Which country has a comparative advantage in the production...
A small price-taking nation imports a good that it could not possibly produce itself at any...
A small price-taking nation imports a good that it could not possibly produce itself at any finite orice. Can you describe plausible conditions under which that nation would benefit from an import tarrid on the good?
Country X and country Y both produce bicycles and sweaters. In country X each worker in...
Country X and country Y both produce bicycles and sweaters. In country X each worker in a day can produce either 5 bicycles or 20 sweaters. In country Y each worker in a day can produce either 3 bicycles of 18 sweaters. Each country has constant opportunity cost of production and each has 100 workers. Enter whole numbers in each blank. In country X the opportunity cost of producing one bicycle is ____ sweaters and in country Y the opportunity...
Consider a small country that imports good Z. Some of the total quantity of Z domestically...
Consider a small country that imports good Z. Some of the total quantity of Z domestically consumed is supplied by domestic producers and the rest of it is imported. Then suppose that the government pays a subsidy of S dollars on each unit of Z that is produced domestically, so that the quantity of Z imported is somewhat reduced (but not reduced to zero). Draw a demand and supply diagram that shows the effect of the subsidy. Compare this subsidy...
Show and explain the case where the small nation Country 1 imports Good A. Initially it...
Show and explain the case where the small nation Country 1 imports Good A. Initially it has an import tariff on Good A, then it eliminates the tariff. Depict this graphically. [Be sure to label the axes and curves of your graph. Label the appropriate surplus areas with letters.] (a) When the country changes from having a tariff to no tariff, what happens to (i) producer surplus, (ii) consumer surplus, (iii) deadweight loss, and (iv) government tariff revenue? (Describe the...
Consider a large country that imports good R. Some of the total quantity of R domestically...
Consider a large country that imports good R. Some of the total quantity of R domestically consumed is supplied by domestic producers and the rest of it is imported. Then suppose that the government imposed a tariff on each unit of R that is imported, so that the quantity of R imported is somewhat reduced. Draw a demand and supply diagram that shows the effect of the tariff. On your diagram, 4 of 4 shade-in the area that represents the...
Consider a small country that imports good Z. Some of the total quantity of Z domestically...
Consider a small country that imports good Z. Some of the total quantity of Z domestically consumed is supplied by domestic producers and the rest of it is imported. Then suppose that the government pays a subsidy of S dollars on each unit of Z that is produced domestically, so that the quantity of Z imported is somewhat reduced (but not reduced to zero). Draw a demand and supply diagram that shows the effect of the subsidy. Compare this subsidy...
Consider a small country that imports good Z. Some of the total quantity of Z domestically...
Consider a small country that imports good Z. Some of the total quantity of Z domestically consumed is supplied by domestic producers and the rest of it is imported. Then suppose that the government pays a subsidy of S dollars on each unit of Z that is produced domestically, so that the quantity of Z imported is somewhat reduced (but not reduced to zero). Draw a demand and supply diagram that shows the effect of the subsidy. Compare this subsidy...
Consider a small country that imports good Z. Some of the total quantity of Z domestically...
Consider a small country that imports good Z. Some of the total quantity of Z domestically consumed is supplied by domestic producers and the rest of it is imported. Then suppose that the government pays a subsidy of S dollars on each unit of Z that is produced domestically, so that the quantity of Z imported is somewhat reduced (but not reduced to zero). Draw a demand and supply diagram that shows the effect of the subsidy. Compare this subsidy...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT