A countervailing duty is a tariff that is levied to counteract:

A. DUmping of goods in the domestic market

B. Sudden surge of imports which hurt a domestic industry

C. Subsidies given to foreign firms by their own governments

D. The tariff on domestic goods that are enacted by foreign governments

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Joshua StredderLv10

5 Oct 2020

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In 2002, President George W. Bush imposed tariffs on certain types of imported steel. He argued that foreign steel producers were dumping their steel on the U.S. market at low prices. The foreign steel producers were able to sell steel cheaply because they received subsidies from their governments. The Bush administration argued that the influx of steel was disrupting the U.S. economy, harming the domestic steel industry, and causing unemployment among U.S. steelworkers. _____ economists are most likely to be sympathetic to these claims because they _____ government intervention in the economy.

A. Keynesian; favour

B. Classical; favour

C. Keynesian; oppose

D. Classical; oppose

pucegoat771

The demand for computers in a certain country is given by D = 20000 â 300P; where P is the price of a computer. Supply by domestic computers producers is S = 10000 + 100P.

(a) Assuming that the economy is closed, find the equilibrium price and production quantity of computers.

(b) The economy opens to trade. The world price of a computer is $20. Find the domestic quantities demanded and supplied and the quantity of imports or exports. Who will support the opening of the computer market to trade and who will oppose it?

(c) The government imposes a tariff of $1 per computer. Find the effects on domestic quantities demanded and supplied and on the quantity of imports or exports. Also find the tariff revenue collected by government. Who will support the imposition of tariff and who will oppose it?

(d) Suppose the government imposes an import quota of 1600 computers. Find the equilibrium price in the domestic computer market, as well as the quantities produced by domestic firms and purchased by domestic consumers.

in Iceland, demand and supply for television use (pay per view) by choice is described by the following demand and supply functions (v represents price per item)

Demand = 198 - 2v

Supply = -2 + 2v

The world market price for TV use is ISK 30. Price per item.

a) Calculate and draw a balance on a picture

i) if no foreign trade is allowed and foreign providers are excluded by excluding IP addresses.

(ii) if 14% VAT is levied on domestic broadcasters and foreign trade is prohibited. The tax is collected by consumers (no collection costs). What is the welfare loss from the tax? Show a picture.

iii) how is the tax burden divided into point ii) and what are its explanations?

b) Domestic tech nerds have avoided technical barriers to using foreign streaming services (VPN gymnastics) and the government does not have the ability to collect VAT on that use and subsequently decide to stop collecting VAT on domestic use: Calculate domestic production, domestic consumption and import. Draw a picture and calculate and benefit from the opening of a business (pretend that there was no VAT for freedom).

c) Due to the pressure of special interest groups of domestic producers, a decision is now made to impose a 30% duty on the world market price of imports (foreign streaming services), but the government has now found that traditional duty can be collected through credit card companies' transactions (no VAT).

i) What will be the price, imports, demand and domestic supply.

ii) How does producer and consumer profit change from point b)?

iii) What will be the macroeconomic loss due to duty compared to free trade without VAT?