Problem Set 1: Trade Barriers under Perfect Competition - Answer Key
|
|
- Elaine Phelps
- 5 years ago
- Views:
Transcription
1 ECO 6333: Trade Policy Spring 2018 Thomas Osang Problem Set 1: Trade Barriers under Perfect Competition - Answer Key Part I: The tariff could be either a specific tariff or an ad valorem tariff. Since the two foreign supply curves are parallel to each other, the free-trade supply curve can be regarded as having shifted up by a constant dollar amount at each quantity imported - hence it can be a specific tariff. However, since the free trade price stays constant for any quantity imported, adding vertically a given percentage of the free-trade price at each quantity also yields a parallel line above the free-trade supply curve by a constant dollar amount. Thus the tariff could also be ad-valorem in nature. Part II: 1. Industries and residents of a country who can benefit from protection are continuously seeking mechanisms by which their well-being can be enhanced. As tariffs have been reduced through international negotiations, these economic agents have sought to preserve their protected status by pushing for legislation and regulations regarding other barriers (NTBs) not covered by the negotiations. 2. Value added under free trade is 1800-( )=700. With tariffs imposed by the SOE, the price of good F becomes 1800(1+0.2)=2160. The price of input A becomes 600*(1+0.1)=660, while the price of input B becomes 500*(1+0.15)=575. Value added under protection is thus 2160-( )=925. ERP is thus ( )/700 = The meaning of this ERP result is that the return to the factors of production in the F industry as a whole has increased by 32.1% due to the tariff structure. As result, there would be an incentive for the (mobile) factors of production to enter this industry. The ERP is higher than the tariff on the final good due to the fact that the intermediate good tariffs are lower than the final good tariff. 3. The ERPs for the country s final goods industries will increase, meaning these production processes are protected to an even greater extent than previously. Trading partners sending final goods to the country would regard this action as a move toward more protectionism. 1
2 4. The unweighted average nominal tariff is equal to: (0.50/4) (2.50/10) = 0.15 = 15.0% 10 The weighted average nominal tariff is equal to: [0.12x x x x x x x150 + (0.50/4)x x250 + (2.50/10)x100]/ = = 12.85% 5. The main problem with the unweighted-average tariff rate is that it does not take into account the relative importance of imports. If a country imports mostly goods with low (high) tariff rates, the unweightedaverage tariff would tend to overstate (understate) the height of a country s average tariff. The weighted-average tariff has a problem as well since it tends to understate the height of a country s average tariff. Why? Assuming similar demand elasticities across all imported goods, the goods with higher tariff rates tend to have lower import levels than those with relatively low tariffs. As a result, the low-tariff goods will have larger weights than the high-tariff products which in turn will tend to bias the weighted-average tariff downward. 2
3 Part III: 1. The winners are: Domestic producer surplus increases by 1, = 1440 Government receives tariff revenue equal to 2250*1.2=2700 The losers are: Domestic consumer surplus declines by = 4890 The country s loss in welfare (equal to the DWL) is = 750 (alternatively: =750) 2. A SOE will always suffer a DWL (area γ) from a tariff with no offsetting gain. Hence, the country s welfare declines with a tariff. P P t d ExpS t P T γ ExpS T M t M T Q 3
4 A LOE can improve its welfare by restricting trade if it chooses a tariff that is not too large (the optimal tariff would be ideal), provided that the foreign export supply curve is sufficiently elastic (but not infinitely elastic) and that there is no retaliation by the foreign country. The graph below shows that a large tariff will reduce the LOE s welfare. P Exp t P t d P T γ Exp T P t δ Imp Q Since area δ is less than area γ, LOE s welfare declines. 4
5 Part IV: Table 1: Autarky, Trade, and Tariff Equilibrium: HC and FC Variable Home Country Foreign Country D A = S A 2 1 P A 6 2 import demand eq. P=6-1.2Q n/a export supply eq. n/a P=2+1.2Q P T M T = X T Welfare (W) in trade price with tariff M t = X t DWL due to tariff tariff transfer W due to tariff % change W due to tariff 2.4% -7.6% 8. The larger welfare loss in the foreign country is due to the fact that the FC is smaller than the HC. Just as smaller countries benefit more from free trade agreements than large economies, they tend to lose more (in percent of free trade welfare) from trade restrictions. 5
Problem Set 1: Trade Barriers under Perfect Competition - Answer Key
ECO 6333: Trade Policy Spring 2019 Thomas Osang Problem Set 1: Trade Barriers under Perfect Competition - Answer Key Part I: The tariff could be either a specific tariff or an ad valorem tariff. Since
More informationProblem Set 2: Tariffs and Non-Tariff Barriers under Perfect Competition - Answer Key
ECO 6333: Trade olicy Spring 2019 Thomas Osang roblem Set 2: Tariffs and Non-Tariff Barriers under erfect Competition - Answer Key art I: F C T F C t F Q t F Q T F IC(p T ) path IC(p t d) path C C u T
More informationIntermediate Microeconomics
Intermediate Microeconomics Fall 018 - M Pak, J Shi, and B Xu Exercises 1 Consider a market where there are two consumers with inverse demand functions p(q 1 ) = 10 q 1 and p(q ) = 5 q (a) Suppose there
More informationTariffs in a large economy
Lecture 8b: Tariffs in a large economy Thibault FALLY C181 International Trade Spring 2018 2- Tariffs in a small economy Effect of tariffs? Conclusion for a small open economy: Tariffs net welfare loss
More information14.54 International Trade Lecture 20: Trade Policy (I)
14.54 International Trade Lecture 20: Trade Policy (I) Tariffs 14.54 Week 13 Fall 2016 14.54 (Week 13) Tariffs Fall 2016 1 / 18 Today s Plan 1 2 Tariffs, Import Demand, and Export Supply Welfare Consequences
More informationChapter 9. The Instruments of Trade Policy
Chapter 9 The Instruments of Trade Policy Introduction So far we learned that: 1. Tariffs always lead to deadweight losses for small open economies 2. A large country can increase its welfare by using
More informationPolicies and Trade - Part I: Import Tariffs and Quotas
Policies and Trade - Part I: Import Tariffs and Quotas AED/IS 4540 International Commerce and the World Economy Professor Sheldon sheldon.1@osu.edu Tariffs as a Barrier to Trade Consensus among economists
More informationECO 352 International Trade Spring Term 2010 Week 3 Precepts February 15 Introduction, and The Exchange Model Questions
ECO 35 International Trade Spring Term 00 Week 3 Precepts February 5 Introduction, and The Exchange Model Questions Question : Here we construct a more general version of the comparison of differences
More informationChapter 8. Preview. Instruments of trade policy. The Instruments of Trade Policy
Chapter 8 The Instruments of Trade Policy Slides prepared by Thomas Bishop Preview Partial equilibrium analysis of tariffs: supply, demand and trade in a single industry Costs and benefits of tariffs Export
More informationChapter 1 Introduction to Economics 1.0 CONTENTS. Introduction to the Series
CONTENTS Introduction to the Series iv 1 Introduction to Economics 5 2 GDP and its Determinants 17 3 Aggregate Demand and Aggregate Supply 28 4 The Macroeconomic Objectives 47 5 Fiscal Policy 73 6 Monetary
More information05/12/2011. Preview. Chapter 9. The Instruments of Trade Policy
Chapter 9 The Instruments of Trade Policy Preview Partial equilibrium analysis of tariffs in a single industry: supply, demand, and trade Costs and benefits of tariffs Export subsidies Import quotas Voluntary
More informationReview Session Dec. 2nd
International Trade Short answer/multiple choice Review Session Dec. 2nd 1. Other things equal, which one of the following will cause an increase in the ERP in the automobile industry? a. a decrease in
More informationECO 445/545: International Trade. Jack Rossbach Spring 2016
ECO 445/545: International Trade Jack Rossbach Spring 2016 PPFs, Opportunity Cost, and Comparative Advantage Review: Week 2 Slides; Homework 2; chapter 3 What the Production Possability Frontier is How
More informationProblem Set 1: Ricardo s Principle of Comparative Advantage
ECO 6331: International Trade Fall 2018 Thomas Osang Due Thursday, September 13, 2018 Problem Set 1: Ricardo s Principle of Comparative Advantage Note: Always show your work, not just your final results.
More informationLecture 12 International Trade. Noah Williams
Lecture 12 International Trade Noah Williams University of Wisconsin - Madison Economics 702 Spring 2018 International Trade Two important reasons for international trade: Static ( microeconomic ) Different
More informationPreview. Chapter 9. The Instruments of Trade Policy
Chapter 9 The Instruments of Trade Policy Copyright 2012 Pearson Addison-Wesley. All rights reserved. Preview Partial equilibrium analysis of tariffs in a single industry: supply, demand, and trade Costs
More informationAggregate Supply and Demand
Aggregate demand is the relationship between GDP and the price level. When only the price level changes, GDP changes and we move along the Aggregate Demand curve. The total amount of goods and services,
More informationTariffs in a small economy
Lecture 8a: Tariffs in a small economy Thibault FALLY C181 International Trade Spring 2018 1- Introduction These coming lectures (Feenstra and Taylor ch. 8): 1. How large are tariffs? 2. Is it beneficial
More information2.4.1 Welfare Analysis of an Import Quota
2.4 Import Quota The benefits of free trade have been emphasized in this course. Free markets and free trade are based on voluntary, mutually-beneficial transactions that make both trading partners better
More informationReview Questions. The Labor Market: Definitions, Facts, and Trends. Choose the letter that represents the BEST response.
Review Questions Choose the letter that represents the BEST response. The Labor Market: Definitions, Facts, and Trends 1. The labor force consists of a. all individuals aged 16 or older who are employed
More informationProblem Set #3 - Answers Analysis of Trade Barriers. P w
age of 5 Analysis of Trade Barriers. Suppose that a small domestic economy has only a single firm producing a good that can be imported, under free trade, for the fixed price shown. The firm s marginal
More informationPublic Affairs 856 Trade, Competition, and Governance in a Global Economy Lecture 12 3/5/2018. Instructor: Prof. Menzie Chinn UW Madison Spring 2018
Public Affairs 856 Trade, Competition, and Governance in a Global Economy Lecture 12 3/5/2018 Instructor: Prof. Menzie Chinn UW Madison Spring 2018 Import Tariffs and Quotas Under Perfect Competition 8
More informationPartial Equilibrium Model: An Example. ARTNet Capacity Building Workshop for Trade Research Phnom Penh, Cambodia 2-6 June 2008
Partial Equilibrium Model: An Example ARTNet Capacity Building Workshop for Trade Research Phnom Penh, Cambodia 2-6 June 2008 Outline Graphical Analysis Mathematical formulation Equations Parameters Endogenous
More informationGlobalization. University of California San Diego (UCSD) Catherine Laffineur.
Globalization University of California San Diego (UCSD) Econ 102 Catherine Laffineur c.laffineur@hotmail.fr http://catherinelaffineur.weebly.com Introduction Outline of the Lecture Instruments of trade
More informationApplication: International Trade
9 Application: International Trade PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University 1 The Determinants of Trade The equilibrium without trade Only domestic buyers and sellers
More informationEconomics 302 Intermediate Macroeconomic
Economics 302 Intermediate Macroeconomic Theory and Policy (Spring 2010) Lecture 22-25 Apr. 12-Apr. 21, 2010 Foreign Trade and the Exchange Rate Chapter 12 Outline Foreign trade and aggregate demand The
More information2.) In graph A, the large country s equilibrium price after the quota is a. P 1 b. P 2 * c. P 3 d. P 4
AGEC 5343 Dr. Shida Henneberry Midterm II November 5, 2009 1.) In graph A, the import quota amount is represented by a. The distance between Q 1 and Q 3 b. The distance between Q 1 and Q 2* c. The distance
More informationA Perfectly Competitive Market. A perfectly competitive market is one in which economic forces operate unimpeded.
Perfect Competition A Perfectly Competitive Market A perfectly competitive market is one in which economic forces operate unimpeded. A Perfectly Competitive Market A perfectly competitive market must meet
More informationInternational Economics. 3 Comparative Advantage and the Gains from Trade
International Economics 3 Comparative Advantage and the Gains from Trade News: Jan 11-19 Indonesia bans mineral exports Indonesia announced a ban on unprocessed mineral exports, effective Jan 12 2014,
More informationSuppose that the government in this economy decides to impose an excise tax of $80 per clock on producers of clocks.
Economics 101 Spring 2016 Answers to Homework #3 DueMarch 15, 2016 Directions: The homework will be collected in a box before the lecture. Please place your name, TA name and section number on top of the
More informationTOPIC 13. Small Country Trade Model. Wednesday, April 4, 12
TOPIC 13 Small Country Trade Model BIG PICTURE Small countries are primarily defined by their inability to affect world prices Free trade unambiguously improves national welfare, but there are winners
More informationSpecific Factors Model (2/1/2012) Econ
Specific Factors Model (2/1/2012) Econ 390 001 Equations production functions o Q C = Q C (K, L C ) production function for cloth o Q F = Q F (T, L F ) production function for food factor price o w = P
More information1/25/2011. Introduction to International Trade. Basic Theory of Trade
Introduction to International Trade Comparative Advantage and the Patterns of International Trade The Standard Trade Model and International Factor Movements A Trade-based Model of Exchange Rates Why Do
More informationEco 300 Intermediate Micro
Eco 300 Intermediate Micro Instructor: Amalia Jerison Office Hours: T 12:00-1:00, Th 12:00-1:00, and by appointment BA 127A, aj4575@albany.edu A. Jerison (BA 127A) Eco 300 Spring 2010 1 / 27 Review of
More informationEconomics 121b: Intermediate Microeconomics Final Exam Suggested Solutions
Dirk Bergemann Department of Economics Yale University Economics 121b: Intermediate Microeconomics Final Exam Suggested Solutions 1. Both moral hazard and adverse selection are products of asymmetric information,
More informationNCEA Level 3 Economics (91400) 2013 page 1 of 7
NCEA Level 3 Economics (91400) 2013 page 1 of 7 Assessment Schedule 2013 Economics: Demonstrate of efficiency of different market structures analysis (91400) Evidence Statement Question Evidence ONE (a)
More informationCable TV
www.liontutors.com ECON 102 Wooten Exam 2 Practice Exam Solutions 1. Excludable Non-excludable Rival Private goods: Food, furniture Common pool goods: Hunting Non-rival Club goods: Cable TV Public goods:
More informationSimon Fraser University Department of Economics. Econ342: International Trade. Final Examination. Instructor: N. Schmitt
Simon Fraser University Department of Economics Econ342: International Trade Final Examination Fall 2009 Instructor: N. Schmitt Student Last Name: Student First Name: Student ID #: Tutorial #: Tutorial
More informationFinal Term Papers. Fall 2009 (Session 03) ECO401. (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service
Fall 2009 (Session 03) ECO401 (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service To Join Simply send following detail to bilal.zaheem@gmail.com Full Name Master Program
More informationEcon Principles of Microeconomics - Assignment 2
Econ 2302 - Principles of Microeconomics - Assignment 2 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. If a nonbinding price ceiling is imposed on a market,
More informationM14/3/ECONO/HP3/ENG/TZ0/XX/M MARKSCHEME. May 2014 ECONOMICS. Higher Level. Paper pages
M14/3/ECONO/HP3/ENG/TZ0/XX/M MARKSCHEME May 2014 ECONOMICS Higher Paper 3 16 pages 2 M14/3/ECONO/HP3/ENG/TZ0/XX/M This markscheme is confidential and for the exclusive use of examiners in this examination
More informationEconomics 452 International Trade Theory and Policy Spring 2009
Name FINAL EXAM Economics 452 International Trade Theory and Policy Spring 2009 FACTOR MOBILITY 1-4 Dubai and Sri Lanka produce energy using labor and land and share the same technology. Initially, labor
More information14 (Tariffs, partial equilibrium analysis of tariff, effect on producer and consumer surplus, cost and benefits of tariff)
Subject Paper No and Title Module No and Title Module Tag Economics 13 INTERNATIONAL ECONOMICS 14 (Tariffs, partial equilibrium analysis of tariff, effect on producer and consumer surplus, cost and benefits
More information3. Trade and Development
Trade and Development Table of Contents 3. Trade and Development the arguments a) Effects of an import tariff b) Effects of an export subsidy c) Arguments for trade policy 164 a) Effects of an import tariff
More informationPBAF 516 YA Prof. Mark Long Practice Midterm Questions
PBAF 516 YA Prof. Mark Long Practice Midterm Questions Note: these 10 questions were drawn from questions that I have given in prior years (in a similar class). These questions should not be considered
More informationFinal Term Papers. Fall 2009 (Session 03a) ECO401. (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service
Fall 2009 (Session 03a) ECO401 (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service To Join Simply send following detail to bilal.zaheem@gmail.com Full Name Master Program
More informationProblem Set 7 - Answers. Topics in Trade Policy
Page 1 of 7 Topics in Trade Policy 1. The figure below shows domestic demand, D, for a good in a country where there is a single domestic producer with increasing marginal cost shown as MC. Imports of
More informationMidterm Exam - Answers. October 29, 2014
Page 1 of 8 October 29, 2014 Answer on these sheets. Use the indicated point values as a guide to how extensively you should answer each question, and budget your time accordingly. Note that the last page
More informationIntermediate Macroeconomics-ECO 3203
Intermediate Macroeconomics-ECO 3203 Homework 3 Solution, Summer 2017 Instructor, Yun Wang Instructions: The full points of this homework exercise is 100. Show all your works (necessary steps to get the
More informationMajor Themes in International Economics + Review of Microeconomic Concepts
Major Themes in International Economics + Review of Microeconomic Concepts Major themes in International Economics Review of microeconomic concepts» Demand, Supply» Demand + Supply = Equilibrium» Utility
More informationFinal Term Papers. Fall 2009 (Session 04) ECO401. (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service
Fall 2009 (Session 04) ECO401 (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service To Join Simply send following detail to bilal.zaheem@gmail.com Full Name Master Program
More informationmore efficient allocation of resources, increased competition, and a source of foreign exchange.
International economics 3.1 International trade 133. The benefits of trade Item 133 Grade 3 IB question Explain that gains from trade include lower prices for consumers, greater choice for consumers, the
More informationA Macroeconomic Theory of the Open Economy
A Macroeconomic Theory of the Open Economy PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University 1 Market for Loanable Funds In an open economy S = I + NCO Saving = Domestic investment
More informationPart Two: International Trade Policy. Chapter 8 Trade Restrictions: Tariffs
Part Two: International Trade Policy Chapter 8 Trade Restrictions: Tariffs To prohibit by a perpetual law the importation of foreign corn and cattle, is in reality to enact, that the population and industry
More informationEconomics 11: Solutions to Practice Final
Economics 11: s to Practice Final September 20, 2009 Note: In order to give you extra practice on production and equilibrium, this practice final is skewed towards topics covered after the midterm. The
More informationExchange rate: the price of one currency in terms of another. We will be using the notation E t = euro
Econ 330: Money and Banking Fall 2014, Handout 8 Chapter 17 : Foreign Exchange Market 1. Foreign Exchange Market Exchange rate: the price of one currency in terms of another. We will be using the notation
More informationLecture 9: Supply in a Competitive Market
Lecture 9: Supply in a Competitive Market October 27, 2015 Overview Course Administration Ripped From Headlines Market Structure and Perfect Competition in the Short Run Profit Maximization in a Competitive
More informationECON 442: Quantitative Trade Models. Jack Rossbach
ECON 442: Quantitative Trade Models Jack Rossbach Instruments of Trade Policy Many instruments available to affect international trade flows and prices. Non-exhaustive list: Tariffs: Taxes on Imports.
More informationEconomics 101 Fall 2018 Answers to Homework #3 Due Thursday, November 8, 2018
Economics 101 Fall 2018 Answers to Homework #3 Due Thursday, November 8, 2018 Directions: The homework will be collected in a box before the lecture. Please place your name, TA name, and section number
More informationOverview Basic analysis Strategic trade policy Further topics. Overview
Robert Stehrer Version: June 19, 2013 Overview Tariffs Specific tariffs Ad valorem tariffs Non-tariff barriers Import quotas (Voluntary) Export restraints Local content requirements Subsidies Other Export
More informationECO 300 MICROECONOMIC THEORY Fall Term 2005 PROBLEM SET 6 ANSWER KEY < 70 2
The distribution of scores was as follows: And 19 people took freebies. QSTION 1: (Total 10 points) CO 300 MICROCONOMIC THORY Fall Term 2005 PROBLM ST 6 ANSWR KY 100 + 11 90-99 30 80-89 11 70-79 6 < 70
More informationGSID, Nagoya University, January The Gains from Trade, Protection, National Welfare and Trading Arrangements
The Gains from Trade, Protection, National Welfare and Trading Arrangements (World Trade and Payments, Chapter 2, 10 and 11, 14) 1 A. The Gain From Trade A1. Gain From Trade and Free Trade Equilibrium
More informationProfessor Christina Romer SUGGESTED ANSWERS TO PROBLEM SET 5
Economics 2 Spring 2017 Professor Christina Romer Professor David Romer SUGGESTED ANSWERS TO PROBLEM SET 5 1. The tool we use to analyze the determination of the normal real interest rate and normal investment
More informationRecitation #6 Week 02/15/2009 to 02/21/2009. Chapter 7 - Taxes
Recitation #6 Week 02/15/2009 to 02/21/2009 Chapter 7 - Taxes Exercise 1. The government wishes to limit the quantity of alcoholic beverages sold and therefore is considering the imposition of an excise
More informationThe Open Economy. (c) Copyright 1998 by Douglas H. Joines 1
The Open Economy (c) Copyright 1998 by Douglas H. Joines 1 Module Objectives Know the major items in the Balance of Payments Accounts Know the determinants of the trade balance Know the major determinants
More informationECM134 International Money and Finance 2012/13 Exam Paper Model Answers
ECM34 International Money and Finance 202/3 Exam Paper Model Answers Alexander Mihailov Department of Economics University of Reading 5 January 202 TWO hours; answer TWO of the five questions that follow.
More information29 TRADE WITH MONEY OVERVIEW
29 TRADE WITH MONEY OVERVIEW 1. The foreign exchange rate is the number of dollars it takes to buy a foreign currency. The exchange rate will be one factor in determining the price of foreign goods in
More informationPREFERENTIAL TRADE AREAS
PREFERENTIAL TRADE AREAS Preferential trade area (PTA) refers to union between two or more countries in which lower tariffs are imposed on goods produced by member countries Trade liberalization on discriminatory
More informationEconomics 452 International Trade Theory and Policy Spring 2014
blue FINAL EXAM Economics 452 International Trade Theory and Policy Spring 2014 FOREIGN DIRECT INVESTMENT 1. Foreign outsourcing is a) considered illegal in the United States b) an example of internalization
More informationEXAMINATION 2 VERSION A "Applications of Supply and Demand" March 9, 2015
Signature: William M. Boal Printed name: EXAMINATION 2 VERSION A "Applications of Supply and Demand" March 9, 2015 INSTRUCTIONS: This exam is closed-book, closed-notes. Simple calculators are permitted,
More informationCome and join us at WebLyceum
Come and join us at WebLyceum For Past Papers, Quiz, Assignments, GDBs, Video Lectures etc Go to http://www.weblyceum.com and click Register In Case of any Problem Contact Administrators Rana Muhammad
More informationALGEBRAIC REPRESENTATION
Elasticity - 1 ALGEBRAIC REPRESENTATION Demand curve: QD = a b P Supply curve: QS = c + d P At equilibrium, QD = QS Solving for the values of P and Q will give the following answers: Equilibrium price:
More informationA Macroeconomic Theory of the Open Economy. Chapter 30
A Macroeconomic Theory of the Open Economy Chapter 30 Key Macroeconomic Variables in an Open Economy The important macroeconomic variables of an open economy include: net exports net foreign investment
More informationINTERNATIONAL TRADE. Xie, Yiqing
INTERNATIONAL TRADE Xie, Yiqing LECTURE 7 IMPORT TARIFFS AND QUOTA UNDER PERFECT COMPETITION Introduction A Brief History of the World Trade Organization The Gains from Trade Import Tariffs for a Small
More informationInternational Economics International Trade (Industrial and Commercial policies lecture 7)
University of Cassino Economics and Business Academic Year 2018/2019 International Economics International Trade (Industrial and Commercial policies lecture 7) Maurizio Pugno University of Cassino 1 Industrial
More informationEQ: What is Price Elasticity of Supply?
EQ: What is Price Elasticity of Supply? Price Elasticity of Supply (ES) is a characteristic of a product describing: The degree of change in quantity supplied by producers when there is a change in price.
More information1. The most basic premise of the aggregate expenditures model is that:
1. The most basic premise of the aggregate expenditures model is that: A. The total output produced in the economy depends directly on the level of total spending B. The level of employment in the economy
More informationChapter 18 Trade and Development, page 1 of 8
Chapter 18 Trade and evelopment, page 1 of 8 trade protection: in general economists advocate international trade encouraging exports has been more successful than limiting imports at encouraging growth
More informationNinth ARTNeT Capacity Building Workshop for Trade Research "Trade Flows and Trade Policy Analysis"
Ninth ARTNeT Capacity Building Workshop for Trade Research "Trade Flows and Trade Policy Analysis" June 2013 Bangkok, Thailand Cosimo Beverelli and Rainer Lanz (World Trade Organization) 1 Partial-equilibrium
More informationPublic Affairs 856 Trade, Competition, and Governance in a Global Economy Lecture 7-9 2/8-15/2016
Public Affairs 856 Trade, Competition, and Governance in a Global Economy Lecture 7-9 2/8-15/2016 Instructor: Prof. Menzie Chinn UW Madison Spring 2017 Increasing Returns to Scale and Monopolistic Competition
More informationEconomics 102 Discussion Handout Week 14 Spring Aggregate Supply and Demand: Summary
Economics 102 Discussion Handout Week 14 Spring 2018 Aggregate Supply and Demand: Summary The Aggregate Demand Curve The aggregate demand curve (AD) shows the relationship between the aggregate price level
More informationEXAMINATION 2 VERSION C "Applications of Supply and Demand" March 9, 2015
Price William M. Boal Signature: Printed name: EXAMINATION 2 VERSION C "Applications of Supply and Demand" March 9, 2015 INSTRUCTIONS: This exam is closed-book, closed-notes. Simple calculators are permitted,
More informationHS: Economics (Sequential) Course Outline
Project Introduction: Different Economic Systems Different Economic Systems Project Introduction 01: What Is Economics? What Is Economics? Scarcity and the Factors of Production Opportunity Cost Production
More informationEXAMINATION 2 VERSION B "Applications of Supply and Demand" March 9, 2015
Signature: William M. Boal Printed name: EXAMINATION 2 VERSION B "Applications of Supply and Demand" March 9, 2015 INSTRUCTIONS: This exam is closed-book, closed-notes. Simple calculators are permitted,
More informationChapter 7 Trade Policy Effects with Perfectly Competitive Markets
This is Trade Policy Effects with Perfectly Competitive Markets, chapter 7 from the book Policy and Theory of International Economics (index.html) (v. 1.0). This book is licensed under a Creative Commons
More informationCIE Economics AS-level
CIE Economics AS-level Topic 4: The Macroeconomy a) Aggregate Demand (AD) and Aggregate Supply (AS) analysis Notes Determinants of AD: Aggregate demand is the total demand in the economy. It measures spending
More informationEcon 170: Contemporary Economics Spring 2008 Final Exam / Section F: Solutions 120 points total
Econ 170: Contemporary Economics Spring 2008 Final Exam / Section F: Solutions 120 points total 1. Markets (2 points each) S 0 S 0 PRICE PER UNIT S 1 D 1 PRICE PER UNIT S 1 D 0 D 0 Quantity (A) D 1 Quantity
More informationdr Bartłomiej Rokicki Chair of Macroeconomics and International Trade Theory Faculty of Economic Sciences, University of Warsaw
Chair of Macroeconomics and International Trade Theory Faculty of Economic Sciences, University of Warsaw Main assumptions of the model Small open economy Short term analysis constant prices and wages
More informationChapter 4. Specific Factors and Income Distribution
Chapter 4 Specific Factors and Income Distribution Introduction From the Ricardian model, we learned that countries are always better off under free trade. Specialization according to comparative advantage
More informationChapter 8 The Instruments of Trade Policy
Chapter 8 The Instruments of Trade Policy Prepared by Iordanis Petsas To Accompany International Economics: Theory and Policy, Sixth Edition by Paul R. Krugman and Maurice Obstfeld Chapter Organization
More informationECO403 Macroeconomics Solved Online Quiz For Midterm Exam Preparation Spring 2013
ECO403 Macroeconomics Solved Online Quiz For Midterm Exam Preparation Spring 2013 Question # 1 of 15 ( Start time: 03:22:55 PM ) Total Marks: 1 If the U.S. real exchange rate increases, then U.S. ----------------
More informationAnswer Guide. Midterm 2, 2017
Answer Guide Midterm 2, 2017 Q2. Perfectly elastic long-run supply results from the industry being able to scale freely, without the firm cost structure changing. This happens when: All firms have the
More informationFinal Term Papers. Fall 2009 ECO401. (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service
Fall 2009 ECO401 (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service To Join Simply send following detail to bilal.zaheem@gmail.com Full Name Master Program (MBA, MIT or
More informationIB Economics International Trade 3.4: Trade Protection
IB Economics: www.ibdeconomics.com 3.4 TRADE PROTECTION: STUDENT LEARNING ACTIVITY Answer the questions that follow. 1. DEFINITIONS Define the following terms: Budget deficit Budget surplus Ceteris paribus
More informationTest 3: April 4, Multiple Choice 30 points (1 each) Select the best answer for each question. Answer the questions on the Scantron sheet.
Test 3: April 4, 2002 Multiple Choice 30 points (1 each) Select the best answer for each question. Answer the questions on the Scantron sheet. 1. Suzanne, a Canadian resident, purchases stock in a Thai
More informationInternational Economics Econ 4401 Midterm Exam Key
International Economics Econ 4401 Midterm Exam Key Tim Uy Name: Student Number: 1 Short Answer Questions (30 Points) 1. [5] Give five reasons (or five theories that explain) why countries trade. Acceptable
More informationExpansion of Network Integrations: Two Scenarios, Trade Patterns, and Welfare
Journal of Economic Integration 20(4), December 2005; 631-643 Expansion of Network Integrations: Two Scenarios, Trade Patterns, and Welfare Noritsugu Nakanishi Kobe University Toru Kikuchi Kobe University
More informationEconomics 102 Discussion Handout Week 14 Spring Aggregate Supply and Demand: Summary
Economics 102 Discussion Handout Week 14 Spring 2018 Aggregate Supply and Demand: Summary The Aggregate Demand Curve The aggregate demand curve (AD) shows the relationship between the aggregate price level
More informationAssignment 2 (Chapter 2)
Assignment 2 (Chapter 2) 1. The mercantilists would have objected to: a) Export promotion policies initiated by the government b) The use of tariffs or quotas to restrict imports c) Trade policies designed
More informationEconomics 111 Exam 1 Spring 2008 Prof Montgomery. Answer all questions. Explanations can be brief. 100 points possible.
Economics 111 Exam 1 Spring 2008 Prof Montgomery Answer all questions. Explanations can be brief. 100 points possible. 1) [36 points] Suppose that, within the state of Wisconsin, market demand for cigarettes
More information