Assume That The United States As A Steel Importing Nation Is Large Enough So That Changes In The Quantity Of Its Impor 1 (75.16 KiB) Viewed 8 times
Assume that the United States, as a steel-importing nation, is large enough so that changes in the quantity of its imports influence the world price of steel. The following table shows the U.S. supply and demand schedules for steel, along with the overall amount of steel supplied to U.S. consumers by domestic and foreign producers. Price Quantity Supplied (Dollars per ton) (Domestic) (Domestic plus Imports) Quantity Demanded 100 0 0 200 0 4 300 1 8 400 2 12 500 3 16 20 24 PRICE (Dollars per ton) 800 700 Using the data in the table, use the blue points (circle symbol) to plot the demand curve and use the orange points (square symbol) to plot the supply curve (domestic plus imports) on the following graph. Then use the black cross to indicate the equilibrium price and quantity. ? 600 500 400 300 200 100 600 700 0 4 02 4 5 6 8 10 12 14 16 18 QUANTITY (Tons of steel) 20 15 14 13 12 11 10 9 22 24 O Demand Supply us free trade + Equilibrium Free trade Supply World tariff Equilibrium Tariff
With free trade, the equilibrium price of steel is $ are supplied by U.S. producers, and per ton. At this price, tons are imported. The new equilibrium is tons are purchased by U.S. buyers, Suppose that to protect its producers from foreign competition, the U.S. government levies a specific tariff of $250 per ton on steel imports. As a result, the free trade the amount of the tariff. curve shifts to the by an amount tons are imported. On the previous graph, use the purple point (diamond symbol) to plot the new world supply curve after the tariff is imposed. Then use the grey point (star symbol) to indicate the equilibrium point given the tariff of $250. tons of steel traded at $ tons per ton. At this price, U.S. producers supply tons, and
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