Economics Assignment: Tariff Impact, Regression, and Free Trade

This economics assignment analyzes the demand for energy bars using a multiple regression model. The analysis examines the impact of factors like average income, the number of stores selling the bars, and tariff rates on demand. The assignment concludes that increased income and more store availability positively affect demand, while tariffs have a negative impact. The document also explores the implications of tariff policies, informing a Trade Minister about the negative effects of tariffs on imported energy bars. Additionally, the assignment discusses the benefits of free trade, including increased competition and consumer access to products at lower prices, contrasting the scenario with the price increases resulting from tariffs. The analysis uses data and models to explain the impact of tariffs on energy bars and other related concepts.

Running head: ECONOMICS ASSIGNMENT
Economics Assignment
Name of the student
Name of the University
Author note

1ECONOMICS ASSIGNMENT
Table of Contents
PROBLEM A.............................................................................................................................2
ANSWER 1............................................................................................................................2
PROBLEM B.............................................................................................................................3
Answer1.................................................................................................................................3
ANSWER 2............................................................................................................................3
PROBLEM C.............................................................................................................................4
ANSWER1.............................................................................................................................4
REFERENCE LIST...................................................................................................................5

2ECONOMICS ASSIGNMENT
PROBLEM A
ANSWER 1
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.95593
3
R Square
0.91380
7
Adjusted R
Square
0.89859
7
Standard
Error
7.81913
5
Observatio
ns 21
ANOVA
df SS MS F
Significa
nce F
Regression 3
11019.
21
3673.0
7
60.077
49 2.95E-09
Residual 17
1039.3
61
61.138
88
Total 20
12058.
57
Coefficie
nts
Stand
ard
Error t Stat
P-
value
Lower
95%
Upper
95%
Lower
95.0%
Upper
95.0%
Intercept
-
12.1602
11.307
61
-
1.0754
0.2972
22 -36.0172
11.696
75
-
36.017
2
11.696
75
Average
income per
person
0.00483
8
0.0018
15
2.6652
07
0.0163
16
0.00100
8
0.0086
68
0.0010
08
0.0086
68
Tariff rate
on imports
of energy
bars
-
6.45698
1.0416
15 -6.199
9.71E-
06 -8.65459
-
4.2593
6
-
8.6545
9
-
4.2593
6
Number of
stores
where
energy
bars are
offered
4.07244
4
1.8978
01
2.1458
75
0.0466
14
0.06843
4
8.0764
54
0.0684
34
8.0764
54

3ECONOMICS ASSIGNMENT
By conducting the multiple regression model it can be said that demand of energy
bars will increase when the average income per person increases (Beckman, 2015). Demand
will also increase when the number of stores offering energy bars will increase. However,
tariff has a negative coefficient on the energy bars which suggests increase in tariff will
decrease the demand for bars.
PROBLEM B
Answer1
Based on the results of multiple regression, the Trade minister is to be informed that
when the rate of tariff on imported energy bars will increase the demand for the bars will
decrease as the coefficient of tariff is negative.
ANSWER 2

4ECONOMICS ASSIGNMENT
Figure1: Impact of tariff on energy bars
The tariff will have negative impact on the energy. The price increases from P to P+T
when tariff is imposed which results decrease in demand for imported bars (Snape, 2018)..
The demand of energy bars which is imported will decreases from D1 to D2.
PROBLEM C
ANSWER1
The above results of the regression shows that tariff has a negative impact on the
demand of energy bars. When free trade takes place, both the countries will benefit from it as
they will get the energy bars at the same price (Beckman, 2015). Free trade will also increase
healthy competition which results in increase in better quality products. When the
international trade takes place without trade barriers or restrictions, it is termed as free trade.
In case of free trade price would have not gone up to P+T and the consumers would have
enjoyed the imported energy bars at the same price.

5ECONOMICS ASSIGNMENT
REFERENCE LIST
Beckman, J., Arita, S., Mitchell, L., & Burfisher, M. (2015). Agriculture in the
Transatlantic Trade and Investment Partnership: Tariffs, Tariff-Rate Quotas, and Non-Tariff
Measures. Economic Research Report, (198).
Snape, R. H. (2018). 9 THE IMPACT ON EXPORTERS OF IMPORT
RESTRICTIONS. Firms and Markets: Essays in Honour of Basil Yamey, 8, 201.