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January 20, 2023

Grantham ECN206 Week 8 Assignment Latest 2023 January

ECN206 Macroeconomics
Week 8 Assignment
Effects of Free Trade and Restrictions
Use the graph below to answer the following questions:
https://content.grantham.edu/academics/GU_ECN206/W8Assignment_files/image002.png
The graph above shows the demand and supply of wrenches for the country of Spain.
1. If trade is avoided, Spain consumes _____ wrenches at a price of _____ per wrench.
2. With free trade, for a world price of $4 per wrench, Spain is producing _____wrenches.
3. With free trade, for a world price of $4 per wrench, Spain is consuming _______ wrenches.
4. With free trade, for a world price of $4 per wrench, Spain is importing _________wrenches.
5. If the world price is $4 per wrench, and the government of Spain imposes a tariff of $2, Spain produces ____________ and imports __________wrenches.
6. If the world price is $4 per wrench, and the government of Spain imposes a tariff of $2, how much tariff revenue will the Spain’s government collect? _____

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