Assignment Of Microeconomics - Import Quota

Added on -2020-02-05

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Microeconomics1
Table of ContentsQUESTION 3.......................................................................................................................................3a. Stating the price of beef per kilo tonnes in Korea and its import value.......................................3b. Calculating consumer and producer surplus before and after the tariff value ............................3c. Assessing the changes take place in consumer and producer surplus on the basis of import quota.................................................................................................................................................3d. Calculating average and marginal product for a rose farm of Terri ............................................42
QUESTION 3a. Stating the price of beef per kilo tonnes in Korea and its import valueOn the basis of the cited case situation price of beef per kilo tonne can be determined in the following manner when 35% tariff would be charged. With tariffs Domestic demand = 750 kilo tonnes Domestic supply = 150 kilo tonnesTotal imports = 750 -150 = 600 kilo tonnes World price = $ 4 million per kilo tonne Without tariffsDomestic demand = 600 kilo tonnes Domestic supply = 300 kilo tonnesTotal imports = 600 -300 = 300 kilo tonnesWorld price = $ 4 million per kilo tonne World price = $4 *(1+35%) = $ 5.4Korea is going to import 300 kilo tonnes with tariff rate of 35%. b. Calculating consumer and producer surplus before and after the tariff value When no tariff is charged:Producer surplus:= 1/ 2 * (4-2) 150= $1503

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