Maurice Tutor

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    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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    Phoniex University
    Oct-2001 - Nov-2016

Category > Management Posted 03 Oct 2017 My Price 5.00

United States

4.9 Years ago, an apple producer argued that the United States should enact a tariff, or a tax, on imports of bananas. His reasoning was that “the enormous imports of cheap bananas into the United States tend to curtail the domestic consumption of fresh fruits produced in the United States.”

a. Was the apple producer assuming that apples and bananas are substitutes or complements? Briefly explain.

b. If a tariff on bananas acts as an increase in the cost of supplying bananas in the United States, use two

demand and supply graphs to show the effects of the apple producer’s proposal. One graph should show the

effect on the banana market in the United States, and the other graph should show the effect on the apple

market in the United States. Be sure to label the change in equilibrium price and quantity in each market and

any shifts in the demand and supply curves. Source: Douglas A. Irwin, Peddling Protectionism: Smoot-Hawley and the Great Depression, Princeton, NJ: Princeton University Press, 2011, p. 22.

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Maurice Tutor
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Status NEW Posted 03 Oct 2017 11:10 PM My Price 5.00

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