Thank you for your explanation ! 09:40 I just want to get a clarification with respect to the concept of large country effect. You said if the US imposes a tariff on the car imported from Japan, Price of imports in Japan will decrease, how is this possible? In my opinion, If the US imposes tariffs on imported cars, this will let Japan reduce the price of its exported goods ( in this case, cars ) so that it can stay competitive Is my logic out of the large country effect ?
Sir, could you please explain, at 12:42 when calculating the gain in producer surplus, why do we add 15 to 170? Why not 30 (200-170) ? Thank you for the job you’ve done!
Quotas also can be combined with tariffs in a tariff- quota. In this case, a certain amount of a good from one country is allowed to enter another country without a tariff. For amounts in excess of that limit a tariff is imposed. E.g. the United States has occasionally restricted imports of sugar by using tariff-rate quotas, which impose hefty tariffs on imports of sugar once a specific threshold has been met. IFT Support Team
Sir , when you calculated the tariff revenue for government in the diagram . Why did you say that cars sold are 20000 . Because demand of cars is 40 000 and supply of cars is 20000 . This doesn't mean that the difference in these two numbers means cars are imported .
Read IFT’s 101 KEY CONCEPTS for Level I here: ift.world/category/101-concepts/
Great explanation. Thanks!
Very good reading in today's economic environment.
Dear Francis,
Thank you for your comments.
IFT Support Team
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Thank you for your explanation !
09:40 I just want to get a clarification with respect to the concept of large country effect.
You said if the US imposes a tariff on the car imported from Japan, Price of imports in Japan will decrease, how is this possible?
In my opinion, If the US imposes tariffs on imported cars, this will let Japan reduce the price of its exported goods ( in this case, cars )
so that it can stay competitive
Is my logic out of the large country effect ?
+1
Sir, could you please explain, at 12:42 when calculating the gain in producer surplus, why do we add 15 to 170? Why not 30 (200-170) ? Thank you for the job you’ve done!
This happens because the demand curve is affect by only 1/2 of the 30 quantitites (triangle area)
Sir, can there be a realistic instance where there is a tariff and a quota on an imported good simultaneously?
Quotas also can be combined with tariffs in a tariff- quota. In this case, a certain amount of a good from one country is allowed to enter another country without a tariff. For amounts in excess of that limit a tariff is imposed. E.g. the United States has occasionally restricted imports of sugar by using tariff-rate quotas, which impose hefty tariffs on imports of sugar once a specific threshold has been met.
IFT Support Team
Sir , when you calculated the tariff revenue for government in the diagram .
Why did you say that cars sold are 20000 . Because demand of cars is 40 000 and supply of cars is 20000 .
This doesn't mean that the difference in these two numbers means cars are imported .
Government revenue is calculated using the total quantity imported which is 40,000 - 20,000 = 20,000.
IFT support team