Question
Consider instead of tariff, a per unit production subsidy of $50 paid by government to domestic producers. a. What is the economic cost of subsidy
Consider instead of tariff, a per unit production subsidy of $50 paid by government to domestic producers.
a.What is the economic cost of subsidy program?
b.What is the price of computer? What is the quantity of import?
c.Compare the deadweight costs of a tariff and subsidy, which one is better off
Consider the world price is $800.
d.If the world price of computer is $800 will the country(Wonderland) be exporter or importer? How much will it want to trade?
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Macroeconomics
Authors: Stephen d. Williamson
5th Canadian edition
133847144, 9780134604794 , 978-0133847147
