Reference no: EM131286015
The government of Optima, a small developing country which cannot affect world prices, wishes to achieve self sufficiency in food so that domestic production is enough to cover caloric needs. At present, food is imported while Coffee is exported. If self sufficiency involves producing at least X units of food at home where X is more than the current production levels. The Finance Minister proposes attaining self sufficiency by putting a tariff on imports of food and raising the tariff until the country is self sufficient. The Minister for Agriculture suggests a subsidy to the production of food. He argues that this would not hurt consumers and so is the best way for production to be raised and the least cost way of attaining self sufficiency as defined above.
(a) (i) Draw the demand and supply of food as a function of the domestic price of food keeping the price of coffee fixed, the imports of food and label the point X .
(ii) The equilibrium with the Finance minister's proposal.
(iii) The equilibrium with the Agriculture minister's proposal.
(b) Assuming that welfare is the sum of consumer surplus, producer surplus and net government revenue what is the change in welfare
(i) For the Finance Minister's proposal being implemented.
(ii) The Agriculture Minister's proposal being implemented.
(iii) What is your recommendation to the government?
(c) How is your answer related to the principle of targeting?
(d) If it was very costly to raise revenue, how would your answer be affected?
(e) Suppose the target was to import no more than DF . What would the optimal policy be? Explain the intuition behind your answer.
|
How do these issue affect the field of psychological testing
: What are at least two ethical issues associated with psychological testing? What impact do these issues have on the field of psychological testing?
|
|
Explain the terms absolute gauge and vacuum pressure
: http://www.transtutors.com/questions/1-what-is-a-conservative-force-2-explain-the-terms-absolute-gauge-and-vacuum-pressur-1997813.htm
|
|
What is the present worth of his remaining income
: Ken will receive a $5,000 annual payment from a family trust. This will continue until Ken in 30; he is now 20. Inflation averages 4% and Ken's real MARR is 8%. If the first payment is a year from now and a total of 10 payments are to be made, ..
|
|
Give examples of macroscopic forms of energy
: Define the following forms of energy and explain the differences among them: internal energy, work, heat.
|
|
Function of the domestic price of food keeping
: Draw the demand and supply of food as a function of the domestic price of food keeping the price of coffee fixed, the imports of food and label the point X.
|
|
Write a first draft of paper
: Write a first draft of paper, including the following:- Identify and develop each main point in an organized, clear manner, using in-text citations. Discuss possible solutions to the issue.
|
|
How is this related to personality
: three topics should be viewed from the perspective of: How is this related to personality? Each topic (article selected) must be clearly connected to personality.
|
|
What is the purpose of this capacitor
: The manufacturer of a three-terminal regulator recommends using a bypass capacitor on the input if the IC is more than 6 in from the unregulated power supply. What is the purpose of this capacitor?
|
|
What are the sac and the smc for the firm
: What are the SAC and the SMC for the firm if it produces 32 hockey sticks? 64 hockey ?sticks? 128 hockey sticks? 256 hockey sticks??You may use SMC= qto work for part (4) if you cannot answer how to derive the ?128 ?SMC. ?
|