Question

Rank the following in ascending order of Home welfare and justify your answers. If two items are equivalent, indicate this accordingly.
a. Tariff of t in a small country corresponding to the quantity of imports M
b. Quota

Question

Consider a large country applying a tariff t to imports of a good like that represented in Figure 8-9.
a. How does the export supply curve in panel (b) compare with that in the smallcountry case? Explain why these

Question

Consider a small country applying a tariff t to imports of a good like that represented in Figure 8-9.
a. Suppose that the country decides to reduce its tariff to t?. Redraw the graphs for the Home and import

Question

Refer to the graphs in Problem 11. Suppose that instead of a tariff, Home applies an import quota limiting the amount foreign can sell to 2 units.
a. Determine the net effect of import quota on the Home economy

Question

The following questions refer to Side Bar: Key Provisions of the GATT.
a. If the United States applies a tariff to a particular product (e.g., steel) imported from one country, what is the implication for its steel tariffs applied

Question

In Figure 7-11, we saw that a fall in the relative price of components leads to an increase in the amount of components imported but that the amount of R&D exported from Home does not necessarily increase. To explore this

Question

The quote from the 2004 Economic Report of the President at the beginning of the chapter generated a lot of controversy that year, as discussed at the beginning of section 3 in the chapter. The chairman of the Council, N.

Question

Read the following excerpt, and using what you have learned in this chapter, discuss how offshoring creates opportunities for the countries involved.
Sudhakar Shenoy, chief executive of Information Management Consultants (IMC) in Reston, makes an effective pitch for offshoring.
Read More

Question

Consider the model of a firm that produces final goods using R&D and components as inputs, with cost data as follows:
Components: Total costs of production = PC • QC = 100
Earnings of high-skilled labor = WH

Question

Consider a U.S. firm’s production of automobiles, including research and development and component production.
a. Starting from a no-trade equilibrium in a PPF diagram, illustrate the gains from offshoring if the United States has comparative advantage in component production.
Read More