What will be the effect of this tariff on the returns

Assignment Help Business Management
Reference no: EM131687020

A small open economy trades food and clothing on world markets at prices P T F and P T C . This country produces both goods (clothing with capital and labor; food with land and labor) and imports food. Capital and land are fixed factors while labor can move between sectors. Policy makers are considering the imposition of a 10% tariff on food. This tariff would raise the price of food in the country by 10% and would not affect the price of clothing. All workers, capital owners and landowners share the same homothetic preferences.

(a) What will be the effect of this tariff on the returns to all 3 factors (the wage W, rental rate of capital RK, and rental rate of land RT )? If these returns increase, be sure to specify whether they will increase by more or less than the tariff (i.e. whether they will increase by more or less than 10%).

(b) Use your answer to part (a) to predict whether each factor will have any incentives to lobby the policy makers for protection (the imposition of the tariff).

Reference no: EM131687020

Questions Cloud

Explain the laissez-faire decision-making style : In the following scenarios, determine whether an autocratic, democratic, or laissez-faire decision-making style would be most appropriate.
Production levels and pricing for widget facility : Also as manager of the facility, what decisions should you make regarding production levels and pricing for your Widget facility?
Product of capital and the marginal product of labor : a. What are the marginal product of capital and the marginal product of labor? Show your work.
Explain ways healthcare organization can overcome challenges : Use your initial post to explain ways a healthcare organization can overcome the challenges - of racial prejudice as well as social and economic inequity.
What will be the effect of this tariff on the returns : What will be the effect of this tariff on the returns to all 3 factors (the wage W, rental rate of capital RK, and rental rate of land RT )?
How to create a service inclination : Creating a Service Inclination An important part of servant leadership is the servant leader's ability to create a service inclination in others.
From the socio-economic corporate social responsibility : From the socio-economic corporate social responsibility, it is imperative for the organisation to take care of the stakeholders,
Create a professional cover letter and resume : Create a professional cover letter, resume, and portfolio that you can use as you pursue your next professional role.
What is your experience of academic writing : What is your experience of academic writing? What makes an essay effective or ineffective?

Reviews

Write a Review

Business Management Questions & Answers

  Caselet on michael porter’s value chain management

The assignment in management is a two part assignment dealing 1.Theory of function of management. 2. Operations and Controlling.

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. Due to increase in the preference for light beer drinkers, Chris Prangel wants to introduce light beer version in Mountain Man. An analysis into the la..

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. An analysis into the launch of Mountain Man Light over the present Mountain Man Lager.

  Analysis of the case using the doing ethics technique

Analysis of the case using the Doing Ethics Technique (DET). Analysis of the ethical issue(s) from the perspective of an ICT professional, using the ACS Code of  Conduct and properly relating clauses from the ACS Code of Conduct to the ethical issue.

  Affiliations and partnerships

Affiliations and partnerships are frequently used to reach a larger local audience? Which options stand to avail for the Hotel manager and what problems do these pose.

  Innovation-friendly regulations

What influence (if any) can organizations exercise to encourage ‘innovation-friendly' regulations?

  Effect of regional and corporate cultural issues

Present your findings as a group powerpoint with an audio file. In addition individually write up your own conclusions as to the effects of regional cultural issues on the corporate organisational culture of this multinational company as it conducts ..

  Structure of business plan

This assignment shows a structure of business plan. The task is to write a business plane about a Diet Shop.

  Identify the purposes of different types of organisations

Identify the purposes of different types of organisations.

  Entrepreneur case study for analysis

Entrepreneur Case Study for Analysis. Analyze Robin Wolaner's suitability to be an entrepreneur

  Forecasting and business analysis

This problem requires you to apply your cross-sectional analysis skills to a real cross-sectional data set with the goal of answering a specific research question.

  Educational instructional leadership

Prepare a major handout on the key principles of instructional leadership

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