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    44.5 The Cost of Protectionism!

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    k_oonn
    The document provides instructions for analyzing the effects of tariffs, quotas, and subsidies on supply and demand diagrams. For each policy scenario, the reader is directed to: draw supply and demand curves based on given functions; find the equilibrium price and quantity; illustrate the impact of the policy on the diagram; and calculate changes in revenue and expenditures for domestic firms, overseas firms, consumers, and the government. The goal is to understand the costs and impacts of protectionist policies through economic analysis and supply and demand modeling.

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    44.5 The Cost of Protectionism!

    Uploaded by

    k_oonn
    40 views2 pages
    The document provides instructions for analyzing the effects of tariffs, quotas, and subsidies on supply and demand diagrams. For each policy scenario, the reader is directed to: draw supply and demand curves based on given functions; find the equilibrium price and quantity; illustrate the impact of the policy on the diagram; and calculate changes in revenue and expenditures for domestic firms, overseas firms, consumers, and the government. The goal is to understand the costs and impacts of protectionist policies through economic analysis and supply and demand modeling.

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    44-5

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    The document provides instructions for analyzing the effects of tariffs, quotas, and subsidies on supply and demand diagrams. For each policy scenario, the reader is directed to: draw supply and demand curves based on given functions; find the equilibrium price and quantity; illustrate the impact of the policy on the diagram; and calculate changes in revenue and expenditures for domestic firms, overseas firms, consumers, and the government. The goal is to understand the costs and impacts of protectionist policies through economic analysis and supply and demand modeling.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    40 views2 pages

    44.5 The Cost of Protectionism!

    Uploaded by

    k_oonn
    The document provides instructions for analyzing the effects of tariffs, quotas, and subsidies on supply and demand diagrams. For each policy scenario, the reader is directed to: draw supply and demand curves based on given functions; find the equilibrium price and quantity; illustrate the impact of the policy on the diagram; and calculate changes in revenue and expenditures for domestic firms, overseas firms, consumers, and the government. The goal is to understand the costs and impacts of protectionist policies through economic analysis and supply and demand modeling.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    of 2

    For each oI the three scenarios listed below, draw the appropriate graphs and complete the

    calculations requested.

    Tariffs:

    II the demand Iunction is Qd 170-5P and the supply Iunction is Qs -3015P, calculate the
    Iigures Ior quantity demanded and quantity supplied Ior prices Irom $1 to $20.

    Use these Iigures to plot the supply and demand curves. What is the equilibrium price and
    quantity?
    The world price is $6, plot this on your supply and demand diagram.
    The government imposes a tariII oI $2. Illustrate the impact oI this on your diagram.
    Calculate the Iollowing:

    1. Domestic Iirm's revenue beIore and aIter the tariII
    2. Overseas Iirm's export revenue beIore and aIter the tariII
    3. Consumer expenditure beIore and aIter the tariII
    4. The government's revenue Irom the tariII


    Quotas:

    II the demand Iunction is Qd 150-5P and the supply Iunction is Qs -1510P, calculate the
    Iigures Ior quantity demanded and quantity supplied Ior prices Irom $1 to $20.

    Use these Iigures to plot the supply and demand curves. What is the equilibrium price and
    quantity?
    The world price is $8, plot this on your supply and demand diagram.
    The government sets a quota Ior Ioreign Iirms oI 15 units. Use your supply and demand
    diagram to illustrate the impact oI this quota.
    Calculate the Iollowing:

    1. Domestic Iirm's revenue beIore and aIter the quota
    2. Overseas Iirm's revenue beIore and aIter the quota
    3. Consumer expenditure beIore and aIter the quota




    Subsidies:
    II the demand Iunction is Qd 190-5P and the supply Iunction is Qs -5015P, calculate the
    Iigures Ior quantity demanded and quantity supplied Ior prices Irom $1 to $20.

    Use these Iigures to plot the supply and demand curves. What is the equilibrium price and
    quantity?
    The world price is $6, plot this on your supply and demand diagram.
    The government provides a subsidy oI $4 per unit Ior domestic producers. Use your
    supply and demand diagram to illustrate the impact oI this subsidy.
    Calculate the Iollowing:

    44.5 The Cost of Protectionism!
    1. Domestic Iirm's revenue beIore and aIter the subsidy
    2. Overseas Iirm's export revenue beIore and aIter the subsidy
    3. Consumer expenditure beIore and aIter the subsidy
    4. The level oI government expenditure on the subsidy

    Using your diagram, show the deadweight welIare loss that results Irom the subsidy.

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