Economics Homework Help

Paraphrase the answers for the following questions as listed below ( for the questions 2,4,5,6 combine the info from the provided text and images into one paraphrased answer :

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Questions:

1. Critics of ever-expanding college enrollments argue that many students should not be going to college. Rather they should be going to trade or vocational schools. That way, they could become electricians, plumbers, carpenters, or stonemasons. The reasoning is that skilled tradespeople often earn higher lifetime incomes than those who go to college and major in humanities. The conclusion is, therefore, that we should have fewer college graduates and more skilled tradespeople. Do you agree or disagree with this argument? Explain your answer.

2. Why don’t supply restriction programs work well in increasing farm prices and income?

3. GMO-free soybeans cost about $2 per bushel more than GMO soybeans.

a) How many hours does someone have to work to pay that premium ($2) in the United States, where average wages are about $25 per hour?

b) How many hours does someone have to work to pay that premium ($2) in those African nations where average wages are about 25 cents per hour?

c) Are attitudes towards GMO-free crops likely to be different in Africa and the United States?

4. American corn farmers receive billions of dollars in taxpayer subsidies each year. These subsidies allow them to sell their grain at prices below what it costs to produce it, particularly for export markets. How do U.S. corn subsidies hurt Mexican farmers?

5. answer the following:

A) How might protective tariffs reduce both the imports and the exports of the nation that levies tariffs?

b) How might the import competition lead to quality improvements and cost reductions by American firms?

6. If it would be cheaper (for the U.S.) to give each steelworker $375,000 per year in cash than impose restrictions on imports of steel, why do we have the import restrictions rather than the cash payments?

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Answers:

Question 1 answer:

Skilled trade person or vocational training can , as a matter of fact , help a person earn higher lifetime incomes . This is possible because vocational trainings occur for a short period of time and finding jobs after such in hand training is easier . There is always requirement for plumbers and masons but we do not require a humanities student in our day to day life . A student of humanities can become a professor or find a suitable job only after spending a lot of time in higher degrees . Then also requirement for such qualified people may vary time to time . Vocational training helps to get even more trained work force which is better for evonomic development .

But we must remember that a country’s work force should be a balance of all kinds of skills . There is a requirement for electricians , carpenters etc but there is also requirement for economists , mathematicians , scientists etc for new innovation , other intellectual jobs etc . So college enrolment is also important . A balance of both , versatality in work force helps a country develop better .

Question 2 answer:

Supply restriction programs limit the supply of (puts a quantitative quota on) the maximum quantity that can be supplied by a producer. The objective is to raise the price of the good by restricting its supply.

However, as supply is restricted and price rises, a shortage develops in market. Quantity demanded of the good falls, following law of demand. Therefore, not all output offered by the sellers is sold at the restricted regime. If quantity demanded fall by a large amount (if demand is highly elastic), in reality sellers’ total income will fall due to unsold output.

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Question 3 answer:

It has been provided that GMO-free soybeans cost about $2 per bushel more than GMO soybeans.

Thus, to purchase same quantity of GMO-free soybeans as well as GMO soybeans, one has to pay $2 extra for GMO-free soybeans.

(a) Average per hour wage rate in United States = $25

For earning $25 in United States, one has to work for 1 hour.

For earning $1 in United States, one has to work for 1/25 hours

For earning $2 in United States, one has to work for 2/25 hours or 4.8 minutes.

Thus, someone has to work for extra 4.8 minutes to pay that premium ($2) in the United States.

(b) Average per hour wage rate in African nations = 25 cents

So, in order to earn $1, one has to work for 4 hours in African nations.

Similarly, to earn $2, one has to work for 8 hours in African nations.

Thus, someone has to work for 8 hours to pay that premium ($2) in the African nations.

(c) As answers in part (a) demonstrates payment of premium of $2 towards GMO-free crop is not much problem in United States as one can earn it by merely working for 4.8 minutes. Working for such a miniscule amount of extra time to pay extra for getting GMO-free crop will not bother the average American and they will favor the GMO-free crops.

On the other hand, as answer in part (b) shows that in order to earn extra $2, one has to work for 8 hours in African nations. This is considerable amount of time. This can totally disrupts the work-leisure balance in African nations. People in these nations will not like to pay such premium whose earning requires such a significant effort in terms of hours worked.

Thus, they would oppose the GMO-free crops

Therefore, the attitude towards GMO-free crops is likely to be different in Africa and United States.

Question 4 answer:

Receiving billions of dollars subsidies each implies that costs of production have fallen substantially for producer of corn in USA. Now it has become crystal clear that US farmer can easily compete in the international market. Other corn producers from rest of world if not provided with same kind of subsidies by respective govts would not able to stand the competition activated by the low cost production from USA. Similarly, Mexico if not provided with subsidies by domestic govt, would not be able to face US producer in market. Whole or substantial market share shall be cornered by US Firms.

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Question 5 answer:

A) If tariff imposes than price increase in a local place, that would be the huge price in the rest of world places or the market as it increases the price than the local demand would decrease, and this leads to reduce the imports. Exporters also affected by import tariffs. If the commodity’s price doesn’t rise, then the whole import tariff’s burden goes on the shoulder of exporters. This leads to the worst-case that they make no benefit or profit.

B) As the state of the U.S. allows import products from the rest of the world than it puts the burden on the firms of America to strengthen the quality and decrease the cost. Because of the U.S. markets open to import, then the price of local places would go down below the local equilibrium price and could be equal in price with the markets of the world. So, the firms of the U.S. have to be a strong player because they do not only play with the local markets but also important in foreign places or markets.

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Question 6 answer:

The rationale for not making cash payments and rather imposing import restrictions even when the former is cheaper is that the former actually reduces the scope of market for the domestic produces. Because if imports are not restricted then the market supplied by domestic producers will shrink and this means that the domestic producers cannot operate on a large scale and thus they cannot use Arrow’s Learning by Doing curve to improve their efficiency. Thus in a long run sense it is justified and preferable to impose restriction on imports even if it costlier to the US government than making cash payments.

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