4

Westein citizens consume 120 thousand litres of gas at the price of $1.20 per litre. Answer the following questions:

a)Use demand and supply graph of gas to depict Westein Republic in Autarky.

b)Briefly explain the term: "Autarky"

c)Supposing Westein decides to trade with other countries and the global price of gas is $0.90 per litre, show the effect on your graph in A above.

d)If President Fix - it of Westein Republic decides to impose a tariff of $0.10 on every litre of gas imported, draw a separate graph and show the following effects:

i)Gain/Loss to consumer surplusii) Gain/Loss to producer surplus (domestic) iii) Gain/Loss to foreign producersiv) Deadweight loss

e)What is a quota?