question one hw, Macroeconomics

Assignment Help:
A small country can import a good at a world price of 10 per unit. The domestic
supply curve of the good is
S = 20 + 10P
The demand curve is
D = 400 – 5P
In addition, each unit of production yields a marginal social benefit of 10.
a. Calculate the total effect on welfare of a tariff of 5 per unit levied on
imports.
S= 20+10(10) = 120
D= 400-5(10) =350
M=S-D 120-350= 230
b. Calculate the total effect of a production subsidy of 5 per unit.

c. Why does the production subsidy produce a greater gain in welfare than
the tariff?
d. What would the optimal production subsidy be?

Related Discussions:- question one hw

Fiscal Policy, When is a balanced budget presented?

When is a balanced budget presented?

Describe the concept of economies of scale, Question: Using diagrams wh...

Question: Using diagrams where appropriate, describe the concepts of scarcity, choice and opportunity cost. Distinguish between negative and positive externalities, explain

Circular flow of income in a simple economy income consumed, The circular f...

The circular flow of income in a simple economy where all income is consumed  The operation of forces in an economy can be expressed in the form of a circular flow of incomes a

Show the example on IS-curve, Q. Show the example on IS-curve? Fi...

Q. Show the example on IS-curve? Figure We can explain this argument with the above figure.  1. Start by identifying R 1 and R 2 in lower graph.  2. Draw aggr

What is this volume in acre-feet, 1. Lake Kickapoo, TX, is approximately 12...

1. Lake Kickapoo, TX, is approximately 12 km in length by 2.5 km in width. The inflow for the month of April is 3.26 m3/s and the outflow is 2.93 m3/s. The total monthly precipitat

National income computation, What is the formula for computing for national...

What is the formula for computing for national income in a closed economy with government intervention

National income, # ???? .. difference between gdp at market price and nnp...

# ???? .. difference between gdp at market price and nnp at factor cost

Calculate the value of a maximum flow, The following network N has sourc...

The following network N has source S and sink T with arc capacities as shown. (a) Use the maximum flow algorithm to find a maximum flow from S to T and draw a diagram

Relationship between the interest rate and the bond price, Relationship bet...

Relationship between the interest rate and the bond price Note that the higher the issue price, the lower the interest rate. In the same way, when the price of a government bon

Determine the real rate of return on investment, A) Suppose Jean Splicer, a...

A) Suppose Jean Splicer, an investor, buys $300,000 of shares of stock in a diversified bundle of Bio-tech firms and exactly one year later sells those shares for $315,000. Assume

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd