A small Country has an industry with supply Qs = 20 + 4P and demand Qd= 100- 6P.

Quantities are in millions of units.

a. What are price and quantity produced and consumed in this industry under autarky?

b. If the world price is $4, what are domestic production and consumption and imports under

free trade?

C. If the government imposes a $2 tariff, what are the domestic price, production,

consumption, and imports?

d. Under this tariff, what are the changes from free trade in consumer and producer surplus,

tariff revenues, and total welfare (all these are expressed in dollars)?

e. If each domestic worker in this industry can produce 15,000 units per year, how much

surplus do consumers lose for each domestic job created by the tariff?

f. How much total welfare is lost for each job created by the tarif?

g. Draw a diagram and label all prices, quantities, tariff revenue, and changes in supluses.