Trump recently announced a 50% increase in tariffs on Chinese imports. U.S. gym equipment suppliers that import machines from China will see a change in which factor of PINTES? Question 10 options: Number of Firms Level of Technology Input Prices Prices of Substitutes in Production
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A tariff on Chinese imports increases the cost of importing gym equipment from China. Show more…
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You manage a company that competes in an industry that is comprised of four equal-sized firms that produce similar products. A recent industry report indicates that the market is fairly saturated, in that a 10 percent industry-wide price increase would lead to a 18 percent decline in units sold by all firms in the industry. Currently, Congress is considering legislation that would impose a tariff on a key input used by the industry. Your best estimate is that, if the legislation passes, your marginal cost will increase by two dollars.Based on this information, what price increase would you recommend if the tariff legislation is passed by Congress?Instruction: Enter your response rounded to the nearest penny (two decimal places).$
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During a stormy meeting of wearable technology firms, several company presidents said that without tariff cushions, many of them would go broke. They represent a new industry that needs protection until their firms grow to a size that will allow them to be competitive. As a result, they would like to see: a. increased taxes on domestic technology firms. b. increased import tariffs. c. increased import quotas. d. Congress enact an export embargo. e. an increase in the value of the US dollar.
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Some of the largest import tariffs, the tax on imported goods, are on shoes. Strangely, the cheaper the shoes, the higher the tariff. The highest U.S. tariff, $67 \%$, is on a pair of $\$ 3$ canvas sneakers, while the tariff on $\$ 12$ sneakers is $37 \%,$ and that on $\$ 300$ Italian leather imports is $12 \%$ (Blake W. Krueger, "A Shoe Tariff With a Big Footprint," Wall Street Journal, November 22,2012 ). Laura buys either inexpensive, canvas sneakers ( $\$ 3$ before the tariff) or more expensive gym shoes $(\$ 12$ before the tariff) for her many children. Use an indifference curve-budget line analysis to show how imposing these unequal tariffs affects the bundle of shoes that she buys compared to what she would have bought in the absence of tariffs. Can you confidently predict whether she'll buy relatively more expensive gym shoes after the tariff? Why or why not?
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