# Tariff Assignment | Homework For You

Q: In class, we discussed the effect of a tariff on a small open economy. However, some countries (e.g. the US) consume so much of some goods that their domestic demand significantly affects the world price. In this question, we will show that under such circumstances a positive tariff may be optimal for a large country.

Don't use plagiarized sources. Get Your Assignment on
Tariff Assignment | Homework For You
Just from \$13/Page

(a) For simplicity, suppose that a good is fully imported so that there are no domestic producersof it. On a diagram, draw the domestic demand curve and the foreign supply curve of the goodto this country and show the free trade equilibrium. Mark off the equilibrium price (p) and2 the equilibrium quantity of the good. Shade the amount of consumer and producer surpluses generated by the equilibrium.

(b) Now draw another diagram which displays a tariff at rate t on the good. Show the new equilibrium price and quantity. How does the sum of consumer surplus, producer surplus, and tariff revenue compare with the sum of producer and consumer surplus in part(a)?

(c) Expand the diagram to include the epossibility of import subsidies (negative taco as in part (a), that the sum of consumer surplus, tariff revenues, and foreign producer surplus is maximized when the tariff is set equal to zero. Draw a diagram (with tariffs/subsidies on the

horizontal axis and the sum of surpluses on the vertical) that relates this total surplus to thetariff.(d) Show that, if the supply curve is upward sloping, foreign producer surplus consistently increases as tariffs are lowered to zero and continues to increase with import subsidies. Draw this curve on the same diagram as in part (c).

(e) If the domestic governments objective is to maximize the sum of consumer surplus and tariff revenue, show that this will lead it to set a strictly positive tariff.

#2 :A plot of land is owned by a Landlord but worked by a Tenant. If the Tenant provides efforts  L he incurs a cost C(L), which increases at an increasing rate with L. The value of output from the plot is given by the production function y=g(L) + x with probability 0.5 and y= g(L)-x with probability 0.5, where g(L) increases at a decreasing rate with L, and x represents random variations in output due to climatic conditions. The variance of output is therefore x2. The Landlord is risk neutral,but the Tenant is risk averse with a coefficient of risk aversion given by r. The Landlord can monitor the output produced by the Tenant, but cannot observe or infer the amount of effort she exerts.

(a) Using the above information, write down the expected utility index of the two parties under(1) a wage contract, (2) a rental contract and (3) a sharecropping contract in which the tenant receives a share s of the output produced and the landlord get the rest [Hint: the cost of risk to the Tenant under a sharecropping contract in this example is r(sx)^2].

(b) In each of these contracts describe how the risk is allocated between to two parties. What about the incentives faced by the Tenant to exert effort ?

(c) With the aid of a diagram, explain how the theoretical constrained-efficient output share, s(and the associated effort level, L*), is determined in a share-cropping contract.

(d) Suppose a new crop variety is introduced which is less sensitive to climate variations, so that x; and hence the marginal cost of risk, declines. According to the above theory, how should this affect the optimal sharing rule ? Get Economics homework help today

Calculate the price
Pages (550 words)
\$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Homework Writing Services
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Human Resources Management (HRM)
GREAT Effort.
Customer 463035, July 8th, 2022
As I expected.
Customer 460551, December 15th, 2021
Military
Excellent Paper
Customer 456821, December 6th, 2022
Military
Excellent work
Customer 456821, October 11th, 2022
Nursing
yes
Customer 452577, January 27th, 2020
Education
Good work
Customer 463647, December 15th, 2022
Social Work and Human Services
Good work.
Customer 462793, July 8th, 2022
Sociology
good work
Customer 452819, September 15th, 2022
Interior Decoration
Excellent work! We look down to your future contribution
Customer 463463, November 16th, 2022
Retail
Thank you for your work. We had to fix some grammatical errors. In the future, please remember to proofread content before submitting. We look forward to future contributions.
Customer 463469, October 21st, 2022
Education
great
Customer 463647, December 22nd, 2022
Nursing
Excellent work!!!
Customer 453939, June 25th, 2020
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend