Welcome to EC 382 International Economics By Dr Jacqueline Khorassani Week Six 1 Week Six Class One Tuesday October 9 14 10 15 00 AC 202 2 Exam 1 Tomorrow at 3 10 PM It will cover everything up to Page 141 The Effect of a Tariff For A Large Country It has 3 parts Part One 20 Multiple Choice questions 3 points each Part Two 5 True False 2 points each Part Three 2 Essays Problems 15 points each 3 This request is not specific enough Can you please go over everything that appeared in your study guide for week 5 please thank you Please Study first Then ask questions 4 And I got this mail You are a lecturer you are paid to cover what s on our course if your attitude is that we can cover the material ourselves from the book then what is your function here at all Please read the course contract I want to use the class time eficiently Lecture based on your demand 5 Another question I am confused about tariff escalation can we go over it Don t worry about this one 6 Request Could you put up the week 6 notes please you said sometimes you forget and that someone should remind you Thanks Jacques Study guide went up on Sunday Class notes will go up on Friday 7 Question When will the lecture notes for week 6 be posted and will the exam be based on 1 5 or 1 6 I explained this in study guide for Week 6 8 Question Could we be asked to give some of the definitions from class book on this test on Wednesday or is it enough to have an understanding of them You need to know everything we have covered 9 Question Could you please go over the concept of terms of trade and in addition to that determining the range of the mutually beneficial terms of trade I am finding it difficult to get my head around this Thank you 10 Answer Opportunity cost of 1 computer in Ireland is 20 books in Germany is 40 books Ireland has comparative advantage in production of books The range of mutually beneficial terms of trade 40 books 1 computer 20 books 11 Question can u explain Reciprocal demand please Yes There are a range of terms of trade that benefit a nation 40 books 1 computer 20 books If we really like foreign books our demand for foreign books is very high this is reciprocal demand we will give 1 computer for 21 books If we don t like foreign books that much our demand for foreign books is very weak this is reciprocal demand we will give 1 computer for 39 books 12 Question Can we also go over the effects of a tariff for a large country Yes I will 13 And another one I got confused when the book started talking about the terms oftrade effect I m also not exactly sure why a tariff imposed in a large country would cause the price of the good in the exporting country to fall Thanks I will explain in detail 14 What are the economic effects of tariffs 2 Case of large importing nation Note A large nation can influence the international price World Prices 8 Domestic government imposes a specific tariff on imported good in the amount of 2 World supplier reduces the price to 7 Domestic Price after tariff 7 2 9 15 What are the economic effects of tariffs in a large importing nation Price The nation is better off if f b d S 9 Tariff 2 8 a c b f 7 10 15 d D 35 40 a b c d loss in CS 37 5 a added to PS 12 5 b efficiency loss 2 5 c f government revenue 40 d loss to consumers 2 5 a c redistributed effect 32 5 b d dead weight loss 5 f loss in exporter s revenue 20 terms of trade effect 16 Quantity International Economics Week Six Class 2 Wednesday October 10 11 10 12 00 Tyndall Exam 1 this afternoon 17 A question why does a specific tariff mean more cheaper cars are produced domestically Because it protects the domestic producers of cheap cars more than it protects the domestic producers of expensive cars Let s do an example 18 Say tariff 1000 car Case 1 The price of the imported car is 10 000 Price goes up to 11 000 Tariff is 10 of the value Domestic producers of cars in this price range can increase their price up to 10 percent they will produce more cars 19 Say tariff 1000 car Case 2 The price of imported car is 50 000 Price goes up to 51 000 Tariff is 2 of the value Domestic producers of cars in this price range can increase their price only up to 2 percent they will not produce a lot more cars 20 A Request Could you please make the lecture slides available with the study guide before each week For those of us still waiting for the book to be delivered often up to 14 business days from online sources the study guide isn t worth much considering the book is also unavailable in the library On that subject why isn t the book available in the library I will check with the library to see what happened 21 A comment This is a response to the comment made by one of the students about your lectures A lot of people were not happy about that comment We are not in college to be spoon fed like kids so that individual should get over it and realize that he she is in 3rd year now People should think before sending stupid comments Jackie you are a great coach and thank you for keeping us on our toes at least we are rest assured of a pass on both your subjects Thanks for your kind remarks Glad to hear that you approve of my way of teaching We all should feel free to say what is on our minds We all say things that sound stupid to others at times I like to hear from all of you 22 A request Hi Jackie Can you please revise with us during the first class instead of going through new stuff just to relax us a little We are very nervous and all that s in our heads right now is exam exam exam Please relax This is only 20 of your grade 23 Exam 1 Answer Key Questio n 1 Form A white B 2 3 D B 4 5 B B 6 7 B D Form B pink A B B A A D B 24 Exam 1 Answer Key Questio n 8 Form A white A 9 10 D C 11 12 C A 13 14 C D Form B pink C A A C A D D 25 Exam 1 Answer Key Questio n 15 Form A white C 16 17 B C 18 19 A B 20 21 D T Form B …