Questions from General Economics

Q: Consider a country that imports a good from abroad. For each

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...

Q: Kawmin is a small country that produces and consumes jelly beans.

Kawmin is a small country that produces and consumes jelly beans. The world price of jelly beans is $1 per bag, and Kawmin’s domestic demand and supply for jelly beans are governed by the following eq...

Q: Having rejected a tariff on textiles (a tax on imports),

Having rejected a tariff on textiles (a tax on imports), the president of Isoland is now considering the same-sized tax on textile consumption (including both imported and domestically produced textil...

Q: Assume the United States is an importer of televisions and there are

Assume the United States is an importer of televisions and there are no trade restrictions. U.S. consumers buy 1 million televisions per year, of which 400,000 are produced domestically and 600,000 ar...

Q: Consider a small country that exports steel. Suppose that a “

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 su...

Q: The world price of wine is below the price that would prevail

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...

Q: Suppose that Congress imposes a tariff on imported autos to protect the

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...

Q: When China’s clothing industry expands, the increase in world supply lowers

When China’s 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, pr...

Q: Consider a monopolistically competitive market with N firms. Each firm’s business

Consider a monopolistically competitive market with N firms. Each firm’s business opportunities are described by the following equations: Demand: Q = 100/N − P M...

Q: Consider the arguments for restricting trade. a. Imagine that

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 t...