As a result of the decrease in the world price, consumer surplus in the United States by $ million, producer surplus by $ million, and total surplus by $ million. (Hint: Recall that the area of a triangle is 12×Base×Height .) Suppose the U.S. government responded by putting a tariff of $100 on imported televisions. As a result of this import tariff, consumer surplus will , and producer surplus will . The government will raise $ million in revenue at the cost of $ million in deadweight loss. True or False: From the standpoint of U.S. welfare, this is a good policy, but domestic producers will not support it. A. True B. False
Answers
The tariff has resulted in a net drop of $80 million in combined surplus between consumers and producers, but a $60 million increase in government income, which is less than the net decrease in combined surplus between consumers and producers.This means that the tariff policy is not helpful for the welfare of the United States, and hence the supplied statement is FALSE.
What are the increase and decreases of consumer and producer surplus?
Prior to technological development, demand was 1000 units, while supply was 400. This means there are 600 units of imports.
The globe price drops by $100 as a result of technical improvement. Area CEDG is responsible for the increase in consumer surplus.
The decrease in producer surplus is given by area CEFG in image format
As a result of the lower world price, the consumer surplus rises $110,000, or $110 million; the producer surplus falls $30,000, or $30 million, and the total surplus raises $80 million.
The price will return to its original level if the government imposes a $100 tariff on imported televisions.
Imports will be reduced to 600 units, as well. Both the consumer and producer surpluses will return to their previous levels. A total of $60 million will be raised by the government.
For more information about consumers and producers, refer below
Answer
The answer and procedures of the exercise are attached in the images below.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Related Questions
You are trying to decide whether to take a vacation. Most of the costs of the vacation (airfare, hotel, and forgone wages) are measured in dollars, but the benefits of the vacation are psychological. How can you compare the benefits to the costs
Perfect Fit Company sells men's shirts and jeans. The average selling price and variable cost for each product follow: Selling price per shirt $22 Selling price per jean $27 Variable cost per shirt $14 Variable cost per jean $19 Fixed costs $3,200 Calculate the breakeven point in units assuming the sales mix is 1:1.
The president of the American Auto Parts Corporation recently testified before members of Congress, urging them to limit the flow of imported automobile parts into the United States. She contended that these imports were priced lower than the foreign producers were charging for the same parts in their own countries. She believes these foreign producers are guilty of _______.
Lisa Frees and Amelia Ellinger had been operating a catering business for several years. In March 2014, the partners were planning to expand by opening a retail sales shop and decided to form the business as a corporation called Traveling Gourmet, Inc. The following transactions occurred in March 2014: a. Received $80,000 cash from each of the two shareholders to form the corporation, in addition to $2,000 in accounts receivable, $5,300 in equipment, a van (equipment) appraised at a fair market value of $13,000, and $1,200 in supplies. Gave the two owners each 500 shares of common stock with a par value of $1 per share. b. Purchased a vacant store for sale in a good location for $360,000, making a $72,000 cash down payment and signing a 10-year mortgage from a local bank for the rest. c. Borrowed $50,000 from the local bank on a 10 percent, one-year note. d. Purchased and used food and paper supplies costing $10,830 in March; paid cash. e. Catered four parties in March for $4,200; $1,600 was billed, and the rest was received in cash. f. Made and sold food at the retail store for $11,900 cash. g. Received a $420 telephone bill for March to be paid in April. h. Paid $363 in gas for the van in March. i. Paid $6,280 in wages to employees who worked in March. j. Paid a $300 dividend from the corporation to each owner. k. Purchased $50,000 of equipment (refrigerated display cases, cabinets, tables, and chairs) and renovated and decorated the new store for $20,000 (added to the cost of the building); paid cash. Compute ending balances for Cash, Accounts Receivable, Supplies, Equipment, Building, Accounts Payable, Note Payable, Mortgage Payable, Common Stock, Additional Paid-in Capital, Retained Earnings, Food Sales Revenue, Catering Sales Revenue, Supplies Expense, Utilities Expense, Wages Expense, and Fuel Expense. 1. Prepare an income statement in good form for the month of March 2014. (Ignore retained earnings and 80,000 in the table just below)2. Operating (O), investing (I), and financing (F) activities affecting cash flows. Include the direction and invest of the effect
Answers
Answer:
Shopping in a traditional manner
If I had to buy, let’s say an iPad, I would visit the official store. First of all, I would take a closer look at the product, revising it carefully, if it feels right and if it meets my needs. Then I would ask for the price if they have a discount or any sale upcoming or payment plan. If everything meets my requirements I would buy the item. On the other hand, if there weren’t any official stores around the place I live in, I would visit three different department stores, preferably where they have the product of my interest displayed, also I would ask about the price and/or payment plan or discounts and availability. I must mention that cost is an important aspect to make a decision on where to buy the item. All of this process would take about 1 or 2 days at most.
Advantages
- -You can see, feel, check the product to dissipate any doubts, there are people willing to answer any question and help to make a better choice.
- Get the product at the same moment you are paying for it and if you want to you can use/wear it immediately.
Disadvantages
- If they are out of stock of the item of your interest, there is a chance you will have to wait a long time for it, although it could happen the store won’t have the product available again.
- The offers are not as wide as on the web sites.
Shopping on the web or via a mobile app
It is almost the same as shopping in a traditional manner, the greater differences are that there are more virtual places/shops online to compare prices and availability and sometimes they have great offers, because of the competition. Generally, the items are cheaper than a department store.
This process could take about a week, especially if you are waiting for a specific offer.
Advantages
- There are lots of options, lots of different online stores, that increase the chances to get a good offer or an item with better characteristics at the same price; if you don’t find availability in one web you can find it in another in no time.
- There is no need to leave your house or put on pause your busy schedule, as you will receive the item at your door.
Disadvantages
- You can’t check the product given they only display a few pictures of it and a brief description, there is no one to answer your doubts about the item, basically, the decision relies on your research and recommendations of the product.
- After making your purchase, you will have to wait a few days to receive your item at home or the workplace. Sometimes happens the store confuses your order sending a different product or other with different characteristics, resulting in having to return the item and wait days to get what you order in the first place.
Explanation:
Which did I prefer and why?
Considering the advances in technology, I prefer to shop online, there I can find what I'm looking for and of course, they have a great offers, too. Besides, with day to day occupations I barely have time to go to a department store, so is easier to access using a computer or an app on the smartphone.
Answers
Answer:
The price of the stock today is $80.00
Explanation:
The price of a stock whose dividends are expected to grow at a constant rate is calculated by the constant growth model of the DDM. The price of a stock under DDM is based on the present value of the expected future dividends that the stock will pay. The formula for price under this model is,
P0 = D1 / r - g
Where,
- D1 is the dividend expected for the next period
- r is the required rate of return
- g is the growth rate in dividends
P0 = 1.6 / (0.05 - 0.03)
P0 = $80.00
Answers
Answer:
A credit to Cash of $299
Explanation:
Journal Entry Debit Credit
Merchandise inventory $62
Delivery charges $46
Office supplies $30
Miscellaneous expenses $51
Cash over and short $100
Cash $299
Cash to be reimbursed = Minimum cash balance required - Cash balance left
Cash to be reimbursed = $500 - $201
Cash to be reimbursed = $299
Answers
Answer:
The amount that will recognize under amortization expenses is $2600.
Explanation:
The first step here would be to calculate the amortization expenses for the first 4 years of the patent, here will use straight line depreciation method,
Formula - original value of asset / useful life in years
- $26,400 / 12
- $2200
Now for the 4 years this amount would become $2200 x 4 = $8800
The amount of amortization for the first half of 2017 ( up to 30 June ) would be-
= half of full year expenses
= $2200 / 2
= $1100
So up to 30 June 2017, the expenses are $9900 ( $8800+$1100), So the new book value would be = $26,400 - $9900
= $16,500
In this $16,500 we will add the amount of legal fees, so the total would be -
$16,500 + $6000
= $22,500
The next step is to divide this value by remaining useful; years which is 7.5,
$22,500 / 7.5
= $3000
Now we will divide this amount by 2 because we have to take out expense for remaining last 6 months of 2017
$3000 / 2
= $1500
Adding the expenses for first and second half of 2017 to take out total amortization expense of 2017 -
$1100 + $1500
= $2600
Answers
Answer:
$84,300
Explanation:
Purchase cost 75000
commission 4500
property taxes 4000
Title insurance 800
Total cost 84300
**Property taxes for current period will be charges as expense and not to be capitalized
c. Why is the demand for labor called a "derived demand."
Answers
Answer:
(A)Wages decrease in the long term
Explanation:
(A) The principles of supply and demand applies here.
Higher worker productivity in a particular industry implies increased demand for workers in the industry (short term effect).
Increased supply of workers implies:
1. output per worker increases, resulting in increase in supply of products in the industry. But, the laws of supply and demand comes in, because when supply increases, prices decrease.
That is, the increase in worker productivity may cause a decrease in prices resulting in a decrease in wages since the firm's revenue declined (long term effect).
2. Increase in the supply of workers in the industry with increased in productivity over workers from other industry because of initial increase in wages. This would lead to a decrease in wages because the supply of workers would exceed demand.
(B) The compensation differential is the additional amount of money that a given worker must be offered in order to motivate him to accept a given undesirable job, relative to other jobs that the worker could perform.
(C) This is called a derived demand because it is often based on the demand for products.
For example, when consumers want more of a particular good or service eg clothing, more firms in the industry will want workers that make this product.