12. 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 one-half 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? LO26.4