Microeconomics

[T.A.]

At the beginning of the 2000s, the United States imposed high import taxes on a number of European goods due to a trade dispute. One of these goods was Roquefort cheese. Show how this tax affects the market for Roquefort cheese in the United States, shifting the appropriate curve and indicating a new equilibrium quantity and market price.

[jake-the-peg]

I can't help you there but I see they've done it again!

What's particualrly ironic ( and you might light to slip it in for some humour) is that the United States FDA actually prevents much of the best European cheese from getting in to the US.

It is illegal to import any unpasturised cheese that has not been matured for at least 2 months.

Given the famous approach the US has to firearms it seems that America is the only country in the world that thinks that cheese is more dangerous to it's citizens than guns!

[Huderon]

I'm not into economics, but a few weeks ago there was an interview on R4 with someone from the US who imports and distributes Roquefort there. In the US it is a luxury cheese, and there will be a price hike over there as a result (though the importers were busy bringing in more than usual before the latest increases taxes were imposed, which will help hold the price for a while).

Have a look at the percentage of total output which was exported to the US, both before and after the imposition of the higher taxes.

If I remember that interview correctly, US sales accounted for something like 2% of production before the latest rise in import taxes. Given that kind of percentage, I'd have said that any drop as a result of the increased taxes is not likely to have a lot of effect on the producers. And being a luxury item, sales in the US are not likely to be affected much by an price hike. Also note that there are speciality producers in the US which make cheeses similar to Roquefort, and these may well gain from any drop in sales of Roquefort.