KEY QUESTION Draw a domestic supply and demand diagram for a product in which the United States does not have a comparative advantage. What impact do foreign imports have on domestic price and quantity? On your diagram show a protective tariff that eliminates approximately onehalf of the assumed imports. What are the price-quantity effects of this tariff on (

a) domestic consumers, (

b) domestic producers, and (

c) foreign exporters? How would the effects of a quota that creates the same amount of imports differ?