The United States imports cheese from a variety of countries. The table above gives the domestic supply of, and demand for, cheese in the United States. The world price of cheese is $12 per pound, and trade is unrestricted
a. How many pounds of cheese are consumed in the United States?
b. How many pounds of cheese are produced in the United States?
c. How many pounds of cheese are imported into the United States?
If a $3 per pound tariff is imposed,
d. How many pounds of cheese are consumed in the United States?
e. How many pounds of cheese are produced in the United States?
f. How many pounds of cheese are imported into the United States?
g. How much will the U.S. government collect in tariff revenue?
h. Who benefits from the tariff? Who loses?
a. 180,000 pounds of cheese are consumed.
b. 60,000 pounds of cheese are produced.
c. 120,000 pounds of cheese are imported.
d. 140,000 pounds of cheese are consumed.
e. 80,000 pounds of cheese are produced.
f. 60,000 pounds of cheese are imported.
g. The government collects $3 per pound × 60,000 pounds = $180,000.
h. U.S. producers and the U.S. government gain while U.S. consumers and foreign producers lose.
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The above figure shows the payoff to two airlines, A and B, of serving a particular route. If the two airlines must decide simultaneously, what will happen if the government offers a $30 subsidy to airlines that serve this route?
A) Both firms will enter profitably. B) Firm A will decide not to enter since firm B will. C) Firm B is still better off not entering. D) Neither firm will have a dominant strategy.
The term "balance of trade" refers to the:
a. importing and exporting of goods. b. importing and exporting of goods and services. c. current account trade balance. d. capital outflows minus inflows.