(SOLVED)Effects of Free Trade and Restrictions
Discipline: Economics
Type of Paper: Question-Answer
Academic Level: Undergrad. (yrs 3-4)
Paper Format: APA
Question
Effects of Free Trade and Restrictions
Use the graph below to answer the following questions:
The graph above shows the demand and supply of wrenches for the country of Spain.
1. If trade is avoided, Spain consumes _____ wrenches at a price of _____ per wrench.
2. With free trade, for a world price of $4 per wrench, Spain is producing _____wrenches.
3. With free trade, for a world price of $4 per wrench, Spain is consuming _______ wrenches.
4. With free trade, for a world price of $4 per wrench, Spain is importing _________wrenches.
5. If the world price is $4 per wrench, and the government of Spain imposes a tariff of $2, Spain produces ____________ and imports __________wrenches.
6. If the world price is $4 per wrench, and the government of Spain imposes a tariff of $2, how much tariff revenue will the Spain’s government collect?
Expert Solution Preview
1) Spain consumes 9 wrenches at a price of $7.5 per
wrench.
2) 4 wrenches.
3) ......