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Suppose That the Following Graph Gives the U

question 104

Essay

Suppose that the following graph gives the U.S.supply (S) of and demand (D) for
auto parts (say steering wheels).U.S.automakers can also import steering wheels
from Mexico at $50 each and from Japan at $40 each.Currently, there is a 60%
tariff on imported steering wheels.
A) How many steering wheels will the United States import?
B) How much tariff revenue will the U.S.government collect?
C) Suppose that the United States and Mexico become part of NAFTA and there is
free trade between the two countries.Now how many steering wheels will the
United States import?
D) Calculate the trade creation gains from free trade in steering wheels with
Mexico.
E) Calculate the trade diversion losses from free trade in steering wheels with
Mexico.
F) Does the United States gain or lose as a result of free trade in steering wheels
with Mexico?

Definitions:

Racial Identities

The sense of self and belonging that individuals associate with a particular racial group.

African American

Refers to citizens or residents of the United States who have total or partial ancestry from any of the native populations of Sub-Saharan Africa.

Ethnic Group

An ethnic group is a category of people who identify with each other based on common ancestral, social, cultural, or national experiences.

Composition

The act or process of combining parts or elements to form a whole, such as in writing, music, or the visual arts.