Table: Demand and Supply of TVs in Australia Price of TVs ($) Quantity Demanded（thousand） Quantity Supplied (thousand) 500 0 50 400 10 40 300 20 30 200 30 20 100 40 10 0 50 0 Assume the nation of Australia is “small,” unable to influence world price, Its demand and supply schedules for TVs are shown in Table. Using graph paper, plot the demand and supply schedules on the same graph. a. Under free-trade conditions, suppose Australia imports TVs at a price of $100 each. (1)How many TVs will be produced, consumed, and (2)Calculate the dollar value of Australian consumer’s surplus and producer’s surplus. b. To protect its producers from foreign competition, suppose the Australian government levies a specific tariff of $100 on TV imported. (1) Determine and show graphically the effects of the tariff on the price of TVs in Australia, the quantity of TVs supplied by Australian producers, the quantity of TVs demanded by Australian consumers, and the volume of trade. (2) Calculate the effect on Australian consumer’s surplus and supplier’s surplus due to the tariff-induced increase in the price of TVs. (3) Calculate the value of the tariff’s revenue effects,redistribution effect and protective effect and consumption effect. (4) What is the amount of deadweight loss imposed on the Australian economy by the tariff? Suppose that $80 of imported wool goes into the domestic production of a suit. suppose also that the free trade price of the suit is $100 but the nation impose a 10 percent nominal tariff on each imported suit. a) calculate the effective rate of protection imposed on the suit. b) Discuss the relationship between the rate of effective protection and the nominal tariff rate on the...
