PROBLEMS

  1. Figure 9-1 shows the Home no-trade equilibrium under perfect competition (with the price PC) and under monopoly (with the price PM). In this problem, we compare the welfare of Home consumers in these two situations.

    1. Question

      JqhA40GNY6URBejpvAteh9Yq0fGDwlRjvnjOhgcZiGgwA5cdBr2kDo0PX+BwXuoTRPLcU73CQmbWRklEWQ4tXdHmeMaaPe8sNxRAXWObgtCeJuesJGWn98ypmFMMOFVg+tEP3+u77XXqrYQHnPDcnvCAdFxC5rMkbHK+DzN8Xc6Mfes/z3Rnxhz74w6dbi/QzlbrdnVXWhfndFVmRdtpXKSNFUJaC0PMO+crINsRi8pHUpti4rQOajsZ8xjjmWPIchKhlpciB/cxVlvKWMtUKWOnjexfRiCPW1MFgRqR5Ye4ZvPN1A2rlKN3xX0KAcITmTSg6VXXtxA4qe7f
      Prob 9 1a. Under perfect competition, with the price PC, label the triangle of consumer surplus and the triangle of producer surplus. Outline the area of total Home surplus (the sum of consumer surplus and producer surplus).

    2. Question

      Sg3B6Sc0SVKvSYjOH5/SuorDaxJNuAymfG/2GnozbkQ3RhmmAM5rhjJrk3e/gzBy3WEMF3O74N3h+vR2njAjzxlU3JnFrNF//QIPbi1qBWbIKaJwZIOQ8klOhtdIw05FLhIXizfEPBjcUeLF
      Prob 9 1b. Under monopoly, with the price PM, label the consumer surplus triangle.

    3. Question

      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
      Prob 9 1c. Producer surplus is the same as the profits earned by the monopolist. To measure this, label the point in Figure 9-1 where the MR curve intersects MC at point B′. For selling the units between zero and QM, marginal costs rise along the MC curve, up to B′. The monopolist earns the difference between the price PM and MC for each unit sold. Label the difference between the price and the MC curve as producer surplus, or profits.

    4. Question

      ltCp8ASjvg5MsNFLQFcelkKitHECfqRQkCui5+q1M1I2itt3aY9qPzau2eclhFtQ7uHC9JkvwXHImHvRmAxi1QNzCOejgqQtvLjV2w==
      Prob 9 1d. Outline the area of total Home surplus with a Home monopoly.

    5. Question

      17srVS0PnwKZryObUefF8nHLVvWH/08bH2EK2Ers6tK8o5w5rbpWw/7UAN0xNs6spCawnesc+La9W02sZLNHnOk10JS5TwAhnGe78pLSYe64ACFXx2uaag0cDmage04pw7JsywXfEBnK17UC8nEO0dY/kc+B2jXbPRGGJRcxAGZ7BNBpTcnf2bcZF9yecyO+xK7vu/ab4KxkdHnwzTZNTw==
      Prob 9 1e. Compare your answers to parts (a) and (d), and outline what the difference between these two areas is. What is this difference called and why?
  2. Figure 9-2 shows the free-trade equilibrium under perfect competition and under monopoly (both with the price PW). In this problem, we compare the welfare of Home consumers in the no-trade situation and under free trade.

    1. Question

      FUTzFdUzDtPDzsXLXfWci026q0lLh5QFqdrY6rs+iKkP9i/+qfcaMaUKQvQJqJzq6F+sfAvTkb0pXdGzlATtGE/RUxf4YfeUFQKsz4qQjnueRJgXJthRSkrCJe8xsRp2qrnH6ywqyJR15+ROyDYTVKH+jVulJswEZN1Od1oJYLDfBZkk/fnZmadcK+glVsIVLkF9E4nzZU0ws78ybYGxAxX/fkuJOOSwK0VaGsQnl3h3KOS3vIuoEk7DdXSbM86HCn7Mp2U2lfBDWOsHvYh5Dy/+N7pNPl37Pn0W5ZuNfHMLIrf66UXwN8iaFPK0rI7qdgiKwgrUNuO7t9de
      Prob 9 2a. Under perfect competition, with the price PW, label the triangle of consumer surplus and the triangle of producer surplus. Outline the area of total Home surplus (the sum of consumer surplus and producer surplus).

    2. Question

      ngyVjMqrC0LxCr0ptU3Efb4u8x1V8uxLvaceX3KylnkPd/UhXE3ui5C3jR6icmx1vnHBV5rY2tPM5Uf37tS7g7r6BAnpqczp6UxXN/S3QadCRhulhMEo3SzKshYgAAHANBuPp40/DlgoYxW84LKRp0xMCD+DWxvaO2YKLArp2HARoXqK0vJrHFWj4rYjhqUtbUmOQEsCdgz0syc+wRgEppP3d4p2LV+a
      Prob 9 2b. Based on your answers to part (a) in this problem and part (a) of the last problem, outline the area of gains from free trade under perfect competition.

    3. Question

      7W0kteN2NpFpHrZIvufSb1UIt8pKtROgpU21klu7hxbTleGbrDfvju+2+DmfA954JbPYEJsHelj7Ew6+X2WygbtbW5TIRCJw9Qw9CKkgL/NpyVIjoE22xqMUY/WFZFPpw5BUYeJMe4f5EUs0gpczsdFVsbwxsFF4TxBIMwO+olcnh4i0oCEqL0y5T5yJT/nZa+c5u9ncbX4VmP7QJeitjw==
      Prob 9 2c. Under monopoly, still with the price PW, again label the triangle of consumer surplus and the triangle of producer surplus.

    4. Question

      U2ou++4VE75jDe2xVsZluzX/m1clY+mi52kVZxg3B3eaZ/XS7RBaQmXEFXajKNKP6cNfsJXPYWWq4/ka9//dKtpqiG5uXKAmFGPY5jpUtx6chLH6cqzRunyrJ+49LSzWPg6Cfb8dP0tzXUFp5XdXjxmWbGLTO9osyq53NiWuU/KwfozoGag4pxCvHXgEuCgvzN35WCCjbbDpr8U5Hcss//5dd04=
      Prob 9 2d. Based on your answers to part (c) in this problem and part (d) in the last problem, outline the area of gains from free trade under Home monopoly.

    5. Question

      w5372a6rS4YKk6hNVbFc62uNrns3IGc1XwJeJE8Xiyy3iyEChSy9ZoRl6lnCVOgumBntvYepTfWP6INDczj1enumyh0IaRybuIrGJPsg0JCptmx2AWZ/CmzewM5fo5Z5X/7QcHELnxp/HIxL6GvP0uNTeuw1gWKc
      Prob 9 2e. Compare your answers to parts (b) and (d). That is, which area of gains from trade is higher and why?
  3. Rank the following in ascending order of Home welfare and justify your answers. If two items are equivalent, indicate this accordingly.

    1. Question

      Eg6JPB/0ojA8EZvW6xlZQj4NzmsJsKuwibz4x0RVv/vz2c03yGVxTFIqaF6xGqlOEa5ki624dE+IThPWKj+outiiCSm0TOgUYDX0YcgoZ2g=
      Prob 9 3a. Tariff t in a small country with perfect competition

    2. Question

      gTb8td9mjPtLVIsRDs45NtORQ/4GQyrNw5D/nfaycK/5bWsvcs0o4MpcWI4sXD6wKGTMoSZu7kqP1QGE8PWHfzDKGEK9GSIInroPGQ==
      Prob 9 3b. Tariff t in a small country with a Home monopoly

    3. Question

      dme15tMsucCoBeODCC/PlKbUZBGMw5BLOiR/lpKtqzZm/hQOPqdvAtMY0RLrA6/b+ppToheRlo1XihqwjhpY7SfizsQB6lhflXfQ9NQyLhVdrtzyT9JwDK1RrnJXqETC
      Prob 9 3c. Quota with the same imports M in a small country, with a Home monopoly

    4. Question

      s0l2kfqBiMrekyjJGL+pYiLr7kmm3qLpn5KEKibfIx/fBCR5lftWwXanqTb0QuGBTc8LeLThRr6hrJg4PCp2bVECRDBpWfp0
      Prob 9 3d. Tariff t in a country facing a Foreign monopoly
  4. Refer to the prices of Japanese auto imports under the VER (Figure 9-5) and answer the following:

    1. Question

      dnIpWOGBO5jhe3I5HWMbgAvtEx+SAnmCVGGW09efm37CViYOQydmvpkFnrRVfEMNSoM3U/UdAzQJ3OhQBniT551i8i+qdC0XEwWgV9mGTBQsH32YVTpZYqXGiZW27Mflr3P+RMCma+3ykm4DiGGw60lz/y1obU+iX1R73Q==
      Prob 9 4a. What component of the price of imported automobiles from Japan rose the most over the period 1980 to 1985?

    2. Question

      gV4hqQ8XCLi6bZHDP0pNh9iix08r7M12Y86/Z6YvnlE7PKzM0M0Zf2cGmJiqMpi+LbLBzMUgPxnuXZ8L4+azR6kdCdFRWzF2J+8m3GmxTihw3NCCkgdU4clHsCw07BNqvZ4HpjsrtNtMOazKdBcrMI4MJtOKK+PFWTUBO9nPMJ8QiFyg0ZlHCGnPz12owpcqWq3DtKRa+LMBj7dIcdgHpmqntrAPq8Lce/DH1CAFUR+AaV/BIfSDSKH4VElM5yR0IJCOC35fk23HbcsdtHIZf/2PmeHvhmIcc6jEHfIjZhy8cOD5c1syvm9zuU5s4JeN7PImG1GhA5xV5tVe79ZTRuwwPNj6s4U13fusm+iw5t/r3P9aKOCzNYlJ2BsnertY
      Prob 9 4b. Sketch how Figures 9-5 and 9-6 might have looked if the United States had applied a tariff to Japanese auto imports instead of the VER (with the same level of imports). In words, discuss how the import prices and U.S. prices might have compared under a tariff and the VER.

    3. Question

      tg3tHXU46T5BF96S5WeaDQhPwYCLQC2AULVVV6LpocQqX5Hh94LTbIe6s425egGUBpRnStMhY6wT5lvWHjVbnmNoZpMyhxKI1yHFOQYGy9+UuPMNfvTIlvrtlGnB325VYK12qg==
      Prob 9 4c. Which policy—a tariff or the VER—would have been least costly to U.S. consumers?
  5. In this problem, we analyze the effects of an import quota applied by a country facing a Foreign monopolist. In Figure 9-7, suppose that the Home country applies an import quota of X2, meaning that the Foreign firm cannot sell any more than that amount.

    1. Question

      UMMtB8CUtmLN01/TmBt2JP2YjcpXB4yf6fpEgrfhkhx6yBK67BkpBRTfFYI6kDYaASrtsUJ61/7DS6XhHbRGfjmSdtWF9+SrIW9Ir1vrSu3nMEfwA9TYEt6Y3Z+Gdiu4Z9jCsRjx4LnxaDhD0aGgVQNd4+KphLWII6/dAo+E3M0=
      Prob 9 5a. To achieve export sales of X2, what is the highest price that the Foreign firm can charge?

    2. Question

      /6Y0hWUioiW77ZsmVUmlRmgNbUuELCsXpYk7ujG/jYDoZM4hGWEj4cz4v/c2sgP+dzR7m70NPPIRtfF5TLFAvcWTugvml4b+o0WFb+eOpDrjlfwRyL1ae8nZ0kibmCq4
      Prob 9 5b. At the price you have identified in part (a), what is the Home consumer surplus?

    3. Question

      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
      Prob 9 5b. Compare the consumer surplus you identify in part (b) with the consumer surplus under free trade. Therefore, outline in Figure 9-7 the Home losses due to the quota. Hint: Remember that there is no Home firm, so you do not need to take into account Home producer surplus or tariff revenue. Assume that quota rents go to Foreign firms.

    4. Question

      MZCME1spntVIjyOyBAqd3R1rIACjJ0IhQcxkttxV7YOogvdI+RYGwiTsHBCI+aT919yDs4GuMr+42U/snt3q/4ECb7pHekjZOPQrw5isMEcCWtz5rD4zHxwBr8+KjNUb3CA334irUez6nQBRMnyfOtZYBlzlAgtkHQNCjOpBUc4rAvtBS5RHtWk157J9jz4Zu4oD2tts1EmXGo2PqBl/8onsx1xT6VzSvy7KO46b0rplWFs38ucDjBmvXa3J+J3hS4ariQ==
      Prob 9 5c. Based on your answer to (c), which has the greater loss to the Home country—a tariff or a quota, leading to the same level of sales X2 by the Foreign firm?
  6. Suppose that the demand curve for a good is represented by the straight line
    P = 10 − Q
    Fill in the missing information in the following chart:

    1. Question

      FjN1ZhTSHQZORsveIekwNHbYzNJ4v4GPkdMEqa+mowvB8x0gDrOKVCpVW8qiJKjCDQm8JIWWTAU0Q8Rm+BnlEQfCJNFLl0LCEnTyhD6FvVWCBp5ghczUsu8DdyQ=
      Prob 9 6a. Draw a graph containing both the demand curve and marginal revenue curve.

    2. Question

      g4jsSNdQ1R1nic1GUZmAzRWxd2P4OyKrUZCDnVntkwq7Q4ngXSHukJBvymqN4D6VM2N0hycnUE5aDDWPhw/iJKWzNiUZfOpVMTCBsKNzlBlfJEhSKeYKSy3UcLUYGdvcZyJhvk2PkDLGK+aMpvq1KKiQhZRq6XqeehYkLWwo+XMvkqQ0zO9Jr2yVagCeiLKTOFOjTGti8zHcliwEwFBT2c1uYQd9LpWE9srWUHWYdsN0QFDE
      Prob 9 6b. Is the marginal revenue curve a straight line as well? What is the slope of the marginal revenue curve? How does that slope compare with that of the demand curve?

    3. Question

      JVOWmhIhaz7Jg6ONNQ1jfOG0ov1lJTTYkyzBXahPsuBbSfmJfHth6yrvjb4y1td9i8YVH5z2m8ZzO8x7jcbH8kwvocyToWTsqqbGe3Enpe6BOYtrYr6CpBTGclK9CQoBcC9tjgsr05kjDfjWZTmV74EebdSK6CNbciX9lKB3miZR96TijJq5PA==
      Prob 9 6c. Does the marginal revenue curve contain negative values over the specified range of quantities? Explain why or why not.
  7. Consider the case of a Foreign monopoly with no Home production, shown in Figure 9-7. Starting from free trade at point A, consider a $10 tariff applied by the Home government.

    1. Question

      EiaLMVcSKBQRCNVSuMLKsrya7UcVmN7EJPH+XPLNedQxhtIE+YsBheqqnJgHvyHyP0RhXg6Hc1fApkOj8Bzn6Kn+10IbncA3BBpF956238PGVZWyyh8Yteae1ezhqgLOD7lYUizj+ycC34VBlgyRtA==
      Prob 9 7a. If the demand curve is linear, as in Problem 6, what is the shape of the marginal revenue curve?

    2. Question

      PSMcg/LkCDoY8fxzZu6Z4r8g3PUx7hRij7TxLwXmTStA8zMZ+e90DerRdO2QeB9KghvqrgBMn2Y/DisxBMG9Ucbkya/sxneJfKFovFXrdYyn703uwntdUrwPNvMQhv1IJ82Z7nMkcJ5CsayEFXH2tXAYiSpoMnzqryKa25pfXN5bFl3diPwKLRCLo9j/rfuh8Wc/hluRdgIZZRSmnseyTAnZTPqZtCykSguMQg==
      Prob 9 7b. How much does the tariff-inclusive Home price increase because of the tariff, and how much does the net-of-tariff price received by the Foreign firm fall?

    3. Question

      U4v5tAx4W3mmiEYMeaq5CKxOLz/f73ho5OKOPjO7BFbeAv9Vovtw77vtA3F/Q+zrYlq26ri0SeMqKnXfmPq0HMq9RS/oE4fZtN4Z11jInqn9W3hTds4+zbUYcOYdK3sw5Ty3TkPtVH8ryFKQB9gRUn0dc2I4Kr+1MJv8SdESP7aVAMdVk0GEBS4VLWfz8zEs0vED1rsTJeiLEeIZ7KUf7P0iTKJriJhi
      Prob 9 7c. Discuss the welfare effects of implementing the tariff. Use a graph to illustrate under what conditions, if any, there is an increase in Home welfare.
  8. Suppose the Home firm is considering whether to enter the Foreign market. Assume that the Home firm has the following costs and demand:

    1. Question

      eZO1a7Eus78GPudMsHcR+NGizueHToorcNc6dI+KEVsusI9PvRCxvHzy6R7fcIMrcC7tVIMf7hE6BGvYaxnLYfPkdEvaIA2n3aLOPZmUXFWFk57X9JHdmZuQ+M0=
      Prob 9 8a. Calculate the firm’s total costs from selling only in the local market.

    2. Question

      pZJqEv421Vs7FPJK/thIFyA1IwAVp376TXwyOF4BYrQD+cXtY/vCAnHiOT5CsBniyXZbbYGpqH3SDWsv6DCcGPWhdTIRr9DY4lhihSFMPU8khglQYX0ZPw==
      Prob 9 8b. What is the firm’s average cost from selling only in the local market?

    3. Question

      nab3IxREnmFesJku2n7EdHUvHe9QE4ZNyqlOJqHjAAyTd+LgH2nprMFCbhk2kRR20uVx8oRKKAEWtmjmGhdLpCRIEnP77v6X9ZM8yuyDjXlGi9ZD
      Prob 9 8c. Calculate the firm’s profit from selling only in the local market.

    4. Question

      x4f0UXoJz0eUppSst7wzH/h1YI1iInlP+vbMXCHnXudf7EnQCM9BUVdUK5ZJNPH/So7woH8nPp0U7mA4gHvQQKHEwRmXCCKpxZZ+UDX4Eme/FSeB
      Prob 9 8d. Should the Home firm enter the Foreign market? Briefly explain why.

    5. Question

      o/qx4OTOiN2evcuwzSM1svb+nyLZcKimXRUGM/CugC980s3cS36zzYJAhsvgjNDqhPE7UTVYYRRxok62h07NCaalYWbDkYnYa3HmNg==
      Prob 9 8e. Calculate the firm’s profit from selling to both markets.

    6. Question

      R5kWnwDrEL5LMGTskjspDGmaJQnAM1GwhthNLSeGt83+RA5J33ThtbBl8i0c3ohoWnsF8M8YdornSV6R
      Prob 9 8f. Is the Home firm dumping? Briefly explain.
  9. Suppose that in response to a threatened antidumping duty of t, the Foreign monopoly raises its price by the amount t.

    1. Question

      Hf+ydoLdI3uv66CoB9L/puKuQxOwlgLpfuFGp7v6FbNSAwZmiliqjgk1QUGWMYRAqXe43IVRxk4NLFIV
      Prob 9 9a. Illustrate the losses for the Home country.

    2. Question

      WhmIDQ5b9oBFeYz9478vQXWGcW4zSxpcqK+62/L06GnLUEYIJJsqRWufRfAw8iF5Kpt+tcY4LDd5fVMkXqGueJPICNGSI3V7zTOs5jfbAwMyHI4MDGsMxr/muqrHoY5r3k0pSDi0i2E24tX3ZT9cNAKER8kNJwg0HHPK8ZMhfZEo5iX299OnfshLVDH2jt13uncd7h/6dHAtfj6hyZMK3u72OF9jRnoewBHM/Q==
      Prob 9 9b. How do these losses compare with the losses from a safeguard tariff of the amount t, applied by the Home country against the Foreign monopolist?

    3. Question

      qUk47msOZnRPzr+CZFpLDDIEro3BRZZQdYpmTlA53bEW3cdEoBcz73Z3Y8rg4QPNWrsBT5q2lqhkKoRldEdNHJwBI+tI26dFYTFo8LS5R1elKsoO+q8j8zC9HnLxqET+25c/4w==
      Prob 9 9c. In view of your answers to (a) and (b), why are antidumping cases filed so often?

  10. Question

    aFcvz67ERa6RJWLmFxr3K9ng+XpwBRIwkcnBPB/E6qfnzCJ56G/3Djg52l+0zrVay24HRD4vbOAtwv9qmiOpAC2FKmjA68Unf2lAOmewU7RVN/UVhPquD+q6Y23r8S28UZ1QzgWIYd8KYUyplm3RZA==
    Prob 9 10. Why is it necessary to use a market failure to justify the use of infant industry protection?

  11. Question

    WlfcNEo6T6JblTKMx/rnYkPk5cIgonhbNRQshPV8t7XtxPP/PFHoKXE91el7fNOwCwhNcBuvjDGcvMQFBC3ACizrGm+5IYArMt5MwBDlAvWeYfe5VpQz19OxHQy3PkcRwPzwBDjJ6yVISNAvIpIzHdrB7Rs2pYdujibnWQ9R0TYA93d4nVBl9WOhFmmu1jCyoBkA6w==
    Prob 9 11. What is a positive externality? Explain the argument of knowledge spillovers as a potential reason for infant industry protection.

  12. Question

    /AMC/O/s6LwIyJ6c+j5BiBj7H0j+Y1FZh+Cop1zRQoK+S8gg0ldx1SEiZtWLE8X559zWQ+K6kuneM2+RYsawg6YsuEJfaWezIj1ihy/d3B3sZPw0weYkMA4cJXk+fkI0BxALW3YzLM3VKUX3LbPwkAiH/HvMazy1N0ayOHLtaXQ0Jdx9
    Prob 9 12. If infant industry protection is justified, is it better for the Home country to use a tariff or a quota, and why?
  13. Figures A, B, and C are taken from a paper by Chad Bown: “The Pattern of Antidumping and Other Types of Contingent Protection” (World Bank, PREM Notes No. 144, October 21, 2009), and updated from Chad Bown, 2012, “Global Antidumping Database,” available at http://econ.worldbank.org/ttbd/

    1. Question

      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
      Prob 9 13a. Figure A shows the number of newly initiated trade remedy investigations, including safeguard (SF), China safeguard (CSF), antidumping (AD), and countervailing duty (CVD) (a countervailing duty is used when foreign firms receive a subsidy from their government, and then the CVD prevents them from charging lower prices in the importing country). Each bar shows the number of new cases in each quarter of the year (Q1, Q2, etc.) for 2007 through Q1 of 2012. The number of cases is graphed separately for developing countries and developed countries. What does this graph tell us about what has happened to the number of such cases since 2007? What might have caused this pattern?

    2. Question

      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
      Prob 9 13b. Figure B shows the number of safeguard (SF) tariff initiations by WTO members. Since 1995 what three years saw the largest numbers of safeguards? What might explain these increases? (Hint: Consider the U.S. business cycle over these years.)

    3. Question

      9/QcIosn8JA/oOjCWuS0InylzXr4UEpCTf/kbTGFVoRs/RavFRVlrFXzrpBUXcvpG6pEmCYZRPP5N9BdoVqhUN8CeF+mEOkGjzMt6022oavDNy5nJs3LBVhCESIEEYBp2VPkRG+Q3pfwMxsH0bmb5PWEkw+chSog5EyMCBRESj2z+Hb+ru26qvelUarkmjbjmhLfErTWj+9HgqZSXa5OnYr5ZidANVYRzLC1KYsxStGhKnXoGmGMPXEDmZu42VFNljChIwztrJ3gjXdX9qRyqw==
      Prob 9 13c. According to Figure B, year 2002 had the most safeguard actions by WTO members. How many action were started that year, and what U.S. safeguard case that year was discussed in this chapter?

    4. Question

      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
      Prob 9 13d. Figure C shows the number of newly initiated antidumping (AD) investigations, for quarters of the year from 2007 through Q1 of 2012. Compare the number of cases in this graph with Figure A, which included safeguard (SF), China safeguard (CSF), antidumping (AD), and countervailing duty (CVD). What can you conclude about the total number of SF, CSF, and CVD cases as compared with the number of AD cases?