Principles of Microeconomics 7th Edition solutions

Principles of Microeconomics 7
The world price of wine is below the price that would prevail in Canada in the absence of trade.a.Assuming that Canadian imports of wine are a small part of total world wine production, draw a graph for the Canadian market for wine under free trade. Identify consumer surplus, producer sur-plus, and t

Principles of Microeconomics 7
Suppose that Congress imposes a tariff on imported autos to protect the U.S. auto industry from foreign competition. Assuming that the United States is a price taker in the world auto market, show the fol-lowing on a diagram: the change in the quantity of imports, the loss to U.S. consumers, the gain

Principles of Microeconomics 7
When Chinas clothing industry expands, the increase in world supply lowers the world price of clothing. a.Draw an appropriate diagram to analyze how this change in price affects consumer surplus, producer surplus, and total surplus in a nation that imports clothing, such as the United States. b.Now d

Principles of Microeconomics 7
Consider the arguments for restricting trade.a.Imagine that you are a lobbyist for timber, an established industry suffering from low-priced foreign competition, and you are trying to get Congress to pass trade restrictions. Which two or three of the five arguments do you think would be most persuasi

Principles of Microeconomics 7
The nation of Textilia does not allow imports of cloth-ing. In its equilibrium without trade, a T-shirt costs $20, and the equilibrium quantity is 3 million T-shirts. One day, after reading Adam Smiths The Wealth of Nations while on vacation, the president decides to open the Textilian market to inte

Principles of Microeconomics 7
China is a major producer of grains, such as wheat, corn, and rice. In 2008, the Chinese government, concerned that grain exports were driving up food prices for domestic consumers, imposed a tax on grain exports.a.Draw the graph that describes the market for grain in an exporting country. Use this g

Principles of Microeconomics 7
Consider a country that imports a good from abroad. For each of following statements, state whether it is true or false. Explain your answer.a.The greater the elasticity of demand, the greater the gains from trade.b.If demand is perfectly inelastic, there are no gains from trade.c.If demand is perfec

Principles of Microeconomics 7
Kawmin is a small country that produces and con-sumes jelly beans. The world price of jelly beans is $1 per bag, and Kawmins domestic demand and supply for jelly beans are governed by the following equations:Demand: QD= 8 PSupply: QS= P,where P is in dollars per bag and Q is in bags of jelly beans.a.

Principles of Microeconomics 7
Having rejected a tariff on textiles (a tax on im-ports), the president of Isoland is now considering the same-sized tax on textile consumption (includ-ing both imported and domestically produced textiles).a.Using Figure 4, identify the quantity consumed and the quantity produced in Isoland under a t

Principles of Microeconomics 7
Assume the United States is an importer of televi-sions and there are no trade restrictions. U.S. con-sumers buy 1 million televisions per year, of which 400,000 are produced domestically and 600,000 are imported. a.Suppose that a technological advance among Japanese television manufacturers causes t

Principles of Microeconomics 7
Consider a small country that exports steel. Suppose that a pro-trade government decides to subsidize the export of steel by paying a certain amount for each ton sold abroad. How does this export subsidy affect the domestic price of steel, the quantity of steel pro-duced, the quantity of steel consum