Question
Economic Analysis of a Tariff You have been provided with information on the price of copper before and after the imposition of a tariff: Under
Economic Analysis of a Tariff
You have been provided with information on the price of copper before and after the imposition of a tariff:
Under Free Trade you have the following information:
World and US Price: $3 per Unit
Domestic Consumption 10 Billion Units Domestic Production: 4 Billion Units
Under a Tariff you have the following information:
New US Price: 4.50 per Unit
Domestic Consumption: 7.5 Billion Units Domestic Production: 4.5 Billion Units
Under the Tariff :
(a) How much does the government gain in tariff revenue?
(b) How do domestic producers gain?
(c) How much do consumers lose?
(d) What is net national gain or loss?
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