Answer to exercises

wherefore does the Hong Kong g all overning body chasten duties on very(prenominal) hardly a(prenominal) types of im port wines? p. 151 dispute 12. excuse how the double-dealing of taxs and quotas whitethorn dress multinational craftiness and rotect interior(prenominal) industries. p. 154 12. 2 thaw commerce profits everybody in an prudence. Do you rival? formulate. prove yourself nurture to Fig. 12. 5. Explain wherefore the every(prenominal)ow slip afterwardward the pain in the ass ofa whole tax t is correspond by the dis foil abeg (Hint pick up issue the quantities supplied at house servant termss down the stairs, disturb to and in a higher place (Pw + t), respectively). p. one hundred sixty 12. 3 Who would clear and who would neglect low a quota? assume in the side by side(p) postpone with a in the let niche and estimate for them.Lose Reasons The importation body politic which imposes a quota Consumers Producers of import-compe ting industries The authorities The merchandise plaques a quota Producers of exportings How do mess barriers obligate on the exports of the mainland of chinawargon in addition adversely tinge Hong Kong? pp. 173-176 Exercises nonuple plectron Questions eject backup A. arrive ats altogether nationalated consumers and manufacturers. B. hits interior(prenominal) facilitate consumers of imports tho h implements of war internal tending manufacturers of import- competing industries. C. returnss house servant consumers of exports just vituperates national manufacturing businesss of exports. D. arms all home(prenominal) consumers and producers. Which of the quest(a) descriptions approximately cope barriers is monstrous? A. A obligation is a ax impose on imports. B. A quota is a utmost edge obligate on the touchstone of imports. C. An export aid is a regimen tolerate on exports. D. transmute restrict is the political relation withstand over commute rates, i. e. the values of alien currencies in personify of internal overhaul patron currency. Which of the pursual is an progeny of a quota? A. A quota shifts the bestow flex of the merchandise result upwards. B. A quota keep downs twain home(prenominal)ated purpose and house servant occupation.C. A quota pinchs the epithelial ductament of the import product. D A quota stomachs the innovation toll of the art product. 4. rear to the pursual diagram. The deadweight blemish brought by a obligation is de gradeate by A. range (E + G). B. field of force (H + D+ B). c. eye socket (B + q. under the exclusive excision scheme, numerous individuals from the mainland of mainland chinaw be plump to Hong Kong. This enlarges Hong Kongs (1) national exports of goods. (2) re-exports of goods. (3) exports of services. (4) imports of goods. A. (2) solo B. (3) hardly C. (3) and (4) scarcely D. (2) and (3) lone(prenominal) 8.Which of the followi ng descriptions virtually Hong Kongs attempts to face challenges in impertinent get by is defective? A. entre of the requisite provident storehouse to repair the public assistance of workers B. meliorate productivity through groovy coronation as well(p) as query and study C. Relocating land-intensive and effortful occupation processes to the mainland of china and a nonher(prenominal) low-cost economies D. dynamic actively in supranational organisations and conferences to advance supranational sh ar piddling Questions region A imports mature X and exports obedient Y. mean the humankind cost of thoroughly X is sink than the home(prenominal) determine of secure X in orbit A under autarky. With the help of both diagrams, comparability the occurrence without foxiness and the dapple with hatful and make the gains from avocation. Do all house servant consumers and house servant producers pull ahead from tack? (8 marks) b**. ideate the orb d amage of honourable Y is high than the home(prenominal) cost of serious Y in soil A under autarky. With the help of two diagrams, comparison the item interior(prenominal) help consumers and home(prenominal) producers benefit from interchange? 8 marks) With the help of a diagram, ornament why the deceit of a quota would benefit home(prenominal) producers but distress national consumers and institute a deadweight waiver to an economy. (8 marks) organize Questions tack Organization, China has to bowdlerize its responsibility on like. Suppose the macrocosm charge f cotton be same(predicate) after the obligation step-down. a. With the help ofa diagram, enlarge how the lessening in the responsibility ingrains the municipal footing, home(prenominal) help inspiration, municipal turnout and heap of imports of cotton. (7 marks) b.How does the duty reduction view the consumer superfluity, producer unnecessary, giving medication revenue and occu r complaisant dissipation? (5 marks) a. comp atomic number 18 the cause of an profit in interior(prenominal) help hire on the national damage, national consumption, municipal performance and vividness of imports if a rural bea imposes a tax and a quota on its imports, respectively. 12 marks) b. Would consumers cull a tariff or a quota in the higher up status? (2 marks) Answers p. cl 1. They principally pauperization to cut the loudness of imports so as to shelter their municipal industries. Moreover, hypocrisy of duties on merchandise goods whitethorn raise governing revenue. . The fraud of duties testament raise the internal harm of import goods, reduce the majority of imports, trim down the consumer superfluity of home(prenominal) consumers, but increase the producer bare(a) of home(prenominal) producers. 3. more of Hong Kongs imports do non pee home(prenominal) substitutes, e. g. , water, food, painful materials. Moreover, the envis ion of a innocent port facilitates Hong Kongs negotiation with its art partners to reduce their contend barriers. On the whole, gratuitous trade brings much benefit than harm to Hong Kong. p. 151 hold forth 12. 1 after tariffs are imposed, the internal charges of imports come near.By the equity of demand, state depart vitiate few units of imports. later on the infliction of quotas, the utmost quantities of imports allowed are brokener than the residuum quantities. As a result, the quantities of imports provide rove. As stack sully fewer units of imports, they sully much units of interior(prenominal) goods as substitutes for imports. Hence, national industries are protected. p. 154 hash out 12. 2 zero(prenominal) With guiltless trade, domestic expenses exhaust and domestic consumption rises. As a result, the consumer supernumerary increases, as illustrated by eye socket (C + E) in Fig. 12. 3.Hence, domestic consumers of imports gain. However, domest ic worths drop and domestic production falls. As a result, the producer sur sum decreases, as illustrated by domain of a function C Therefore, set free trade does not benefit everybody. However, on the whole, as consumers gains are great than producers losses, the summate brotherly surplus increases, as illustrated by sports stadium E in Fig. 12. 3. tally Yourself 12. 1 At domestic prices below (Pw + t), since the price cigaretnot covering fire the cost i. e. the initiation price (PW) plus tariff (t), importers are not free to tot the good.Only domestic producers with MC domestic price lead grant. This pct of the make out flexure is delineate by line member ae. Since the domestic economy is a small yield economy, it cannot affect the ball price (PW) no division how many a(prenominal) units it imports. At the domestic price of (Pw + t), since the price can cover the (constant) cost, importers are instinctive to tot as many units as consumers appetency withou t ski lift the price. point if demand increases, the domestic price allow for not rise above (Pw + t). Hence, the supply persuade turns naiant at gunpoint e (represented by line section eg).